Last week, you might have seen that Wix.com Ltd. (NASDAQ:WIX) released its full-year result to the market. The early response was not positive, with shares down 7.4% to US$137 in the past week. Revenues of US$761m were in line with expectations, although statutory losses per share were US$1.71, some 14% smaller than was expected. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the most recent consensus for Wix.com from 15 analysts is for revenues of US$950.4m in 2020, which is a huge 25% increase on its sales over the past 12 months. Statutory losses are expected to reduce, shrinking 11% from last year to US$1.91. Before this latest report, the consensus had been expecting revenues of US$954.2m and US$1.22 per share in losses. So there's definitely been a decline in analyst sentiment after the latest results, noting the large cut to new EPS forecasts.
The consensus price target held steady at US$160, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Wix.com at US$180 per share, while the most bearish prices it at US$102. This shows there is still quite a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Further, we can compare these estimates to past performance, and see how Wix.com forecasts compare to the wider market's forecast performance. It's pretty clear that analysts expect Wix.com's revenue growth will slow down substantially, with revenues next year expected to grow 25%, compared to a historical growth rate of 32% over the past five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 11% next year. Even after the forecast slowdown in growth, it seems obvious that analysts still thinkWix.com will grow faster than the wider market.
The Bottom Line
The most important thing to take away is that analysts reconfirmed their loss per share estimates for next year. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that Wix.com's revenues are expected to grow faster than the wider market. The consensus price target held steady at US$160, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have forecasts for Wix.com going out to 2024, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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