Wells Fargo Upgrades Wix.com (WIX) to Overweight

Wells Fargo analyst Alec Brondolo upgraded Wix.com (NASDAQ: WIX) from Equal Weight to Overweight with a price target of $216.00 (from $173.00).

The analyst comments "Strong partner checks leave us confident Wix Studio pricing represents a meaningful lever in 2026. Recent round of partner checks suggest: 1) strong sentiment on Wix Studio, 2) add'l value added by AI (Astro), 3) waning WP sentiment. Wix Studio is a premium product vs the core editor but right now pricing is the same (ex 1); seems incongruous. In early '23 EditorX was priced at a ~30% premium vs. core editor (ex 2); see a reasonable chance WIX tries to create a premium for Studio in '26. Raising 2026E bookings 2% to incorporate price increases into our model (ex 3); our 2026E / 2027E FCF are now 5% ahead. We are now assuming an 8% / 15% increase to core builder / Wix Studio (est Studio represents ~10% of 2025 CS bookings, ex 4) pricing in '26, leaving our creative subscription bookings estimate 2% ahead of consensus (+14% y/y v 12%). Our +14% y/y CS bookings est implies 8pts of underlying growth ex. pricing, accounting for cont'd ramp of Studio & modest (4%) core builder growth. See a strong catalyst path ahead: product release & analyst day in Aug - Oct timeframe, early '26 price increases. While the April release of Wixel was disappointing (unlikely to drive bookings for several years, if at all), we expect the Fall release will more closely align with the core web presence business and represent a more meaningful catalyst for shares (potential products: improved AI web builder, expanding existing AI builder to web & mobile apps, similar to Loveable). WIX is currently trading at 10x our 2027E FCF / Share, relative to a 1SD of 16x - 34x; appears punitive for a business with a relatively balanced AI risk / reward profile. New AI web builders are gaining traction, but at 5% of industry UVs (exhibit 5), risk feels manageable. At the same time, WIX could still find a way to leverage AI to improve ARPU or conversion. Difficult to know with conviction how AI ultimately ends up impacting WIX, but at 10x P/FCF risk/reward appears skewed to the upside."

For an analyst ratings summary and ratings history on Wix.com click here. For more ratings news on Wix.com click here.

Shares of Wix.com closed at $149.10 yesterday.

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