Forgotten Internet Stock Rebounds in 2023
Learn about the impressive comeback of Wix.com and its potential as a solid buy for 2024.
Wix.com's Remarkable Comeback
In a year marked by the resurgence of forgotten companies, Wix.com stands out as an impressive success story. Despite experiencing a significant drop in stock price from its all-time highs in early 2021, Wix.com rebounded by 60% in 2023. The company has made notable progress towards sustainable growth, making it a potential solid investment choice for 2024.
The digital economy suffered great losses in 2020 and 2021, but Wix.com has managed to turn its fortunes around. The company has focused on enhancing its website building and internet services, leading to a reacceleration of revenue growth throughout 2023. This growth has been driven by new solutions and resources, including generative AI and partnerships with major players like Google and Mailchimp.
Wix.com's Financial Performance
Alongside its impressive growth, Wix.com has also made significant strides in improving its profitability. After facing losses in the past, the company has successfully achieved profitability on a free cash flow and GAAP net income basis in recent quarters. Wix.com expects to maintain profitability on a GAAP basis for the full year 2023.
The company's success in controlling costs and achieving better-than-expected growth has positioned it ahead of schedule to reach its goal of a 25% or better free cash flow margin by 2025. Analysts have already projected a minimum 20% free cash flow margin for 2024, indicating the company's potential for continued success. With Wix.com's leaner operating model and sustained growth, it presents a reasonable value for investors.
Consider Investing in Wix.com
If Wix.com can maintain its current growth trajectory and achieve its financial targets, it has the potential to be a solid investment for 2024 and beyond. Wall Street analysts have already identified its potential, with early estimates suggesting a minimum 20% free cash flow margin for the next year. With a price-to-expected-free-cash-flow ratio of around 19, Wix.com appears reasonably priced for investors.
Investors should carefully evaluate Wix.com's ability to achieve its growth targets and continued profitability before making any investment decisions. However, if the company continues its positive trajectory, it has the potential to deliver strong returns in the coming years.
