With the business potentially at an important milestone, we thought we'd take a closer look at Wix.com Ltd.'s (NASDAQ:WIX) future prospects. Wix.com Ltd., together with its subsidiaries, develops and markets a cloud-based platform that enables to create a website or web application in North America, Europe, Latin America, Asia, and internationally. With the latest financial year loss of US$425m and a trailing-twelve-month loss of US$8.8m, the US$7.3b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Wix.com's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Wix.com
Consensus from 19 of the American IT analysts is that Wix.com is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$71m in 2024. So, the company is predicted to breakeven approximately a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 41% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Wix.com's upcoming projects, though, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. Wix.com currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.
Next Steps:
There are key fundamentals of Wix.com which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Wix.com, take a look at Wix.com's company page on Simply Wall St. We've also compiled a list of essential aspects you should further research:
- Valuation: What is Wix.com worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Wix.com is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Wix.com’s board and the CEO’s background.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Valuation is complex, but we're helping make it simple.
Find out whether Wix.com is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
