On Monday, JPMorgan (NYSE:JPM) adjusted its price target on shares of Wix.com (NASDAQ:WIX), an online platform for creating websites, to $148 from the previous $127 while maintaining a Neutral rating on the stock. The revision reflects a 17% increase in the price target.
The firm attributed the new price target to a sequential re-acceleration of the company's bookings growth, which hit 10% year-over-year, and a record high free cash flow (FCF) margin of approximately 26%. The analyst noted that the financial guidance for the next fiscal year has been revised upwards, which might lead to upward revisions in the consensus estimates.
The optimism from JPMorgan stems from the rollout of several products by Wix.com in recent quarters, with a significant contribution from Wix Studio. Wix Studio, in particular, has experienced a surge in account creation over the past three months. Despite the second-quarter revenue forecast for fiscal year 2024 falling slightly below consensus expectations, the firm expressed increased confidence that the upcoming quarter is likely to mark the low point in revenue growth dynamics.
InvestingPro Insights
In light of JPMorgan's updated price target for Wix.com, real-time data from InvestingPro offers additional context for investors considering the company's stock. Wix is currently trading at a high earnings multiple, with a P/E ratio of 233.33, reflecting a premium valuation relative to near-term earnings growth. Despite this, analysts predict the company will be profitable this year, and net income is expected to grow. This aligns with JPMorgan's positive stance on Wix's financial guidance and product rollout impact.
From a performance standpoint, Wix has had a significant price uptick over the last six months, with a 38.04% total return, indicating strong investor confidence. Moreover, with a market capitalization of $7.59 billion and a gross profit margin of 67.18% for the last twelve months as of Q4 2023, the company's financial health appears robust. For investors seeking more comprehensive analysis and additional InvestingPro Tips, there are 11 more tips available, which can be accessed with a special offer using the coupon code PRONEWS24 for an extra 10% off a yearly or biyearly Pro and Pro+ subscription.
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