Seeking Alpha

Wix higher after underwriters offer bullish takes

  • While Twitter trades lower following underwriter coverage launches that feature a mixture of bullish, neutral, and bearish ratings, (WIX +4.9%) is making new post-IPO highs after all five its underwriters issued bullish opinions.
  • JPMorgan (Overweight, $32 PT) expects Wix to post 79% revenue growth in 2013, and a 33% CAGR from 2013-2018. The firm praises Wix's differentiated site-building platform (features a drag-and-drop UI and HTML5 support) and large addressable market (27M small businesses in the U.S. alone), and sees its base of 41M free users driving plenty of new premium subscriptions (currently at 700K).
  • "So easy to use, my 7-year-old created a Website," reads the title of Oppenheimer's (Outperform, $25 PT) report. The firm notes global spending by small businesses on web presence and apps is expected to show a 17% CAGR from 2012-2015, and that Wix's App Market allows it to grab a piece of an SMB cloud services market expected to be worth $79B in 2015.
  • RBC (Outperform, $22 PT) likes the fact Wix's revenue growth has accelerated for four straight quarters, and that its 80%+ gross margin provides room for major EBITDA margin expansion. At the same time, it isn't expecting positive EBITDA until 2016, and points out over 65% of revenue is currently consumed by sales/marketing spend.
  • Shares are now up 32% from a November IPO price of $16.50.
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