Wix.com slips even as Credit Suisse starts coverage with outperform rating
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Wix.com (NASDAQ:WIX) shares slipped 1% in premarket trading on Friday even as investment firm Credit Suisse started coverage on the web development company with an outperform rating.
Analyst Christopher Zhang, who also put a $105 per-share price target on Wix.com (WIX) shares, noted the company is a "leading" content management system company that has a number of other areas where it can see growth, including the intersection of software and payments.
"After heavy investments in the past [roughly] 4 years, we believe Wix is on the cusp of regaining and expanding its EBIT & FCF margins over the coming years with a strong commitment to cost discipline, which should support its share price despite the macro weakness," Zhang wrote in a note to clients.
The analyst added that Wix.com (WIX) is still likely to continue growing in the CMS space due to the low penetration of software-as-a-service in the space, as well as the prevalence of fragmented web and commerce tools.
Additionally, Wix.com (WIX) could also see further gains, including stronger revenue growth and margin expansion if its Commerce and Partners business continues to take share from competitors, including Google (GOOG) (GOOGL) Workspace and other apps.
Earlier this week, it was disclosed that hedge fund Starboard Value had trimmed its position in Wix.com (WIX), while making several other changes to its portfolio.