Wix.com stock rating reiterated at Buy by StoneX on AI margins

StoneX maintains a Buy rating on Wix.com (NASDAQ:WIX) stock, with a price target of $110.00, following a meeting with the company's investor relations team. The stock is currently trading at $79.67, and InvestingPro data indicates the company is undervalued relative to its Fair Value, suggesting potential upside for investors. Wix's Base44 AI platform has outperformed expectations, excelling in quality, speed, utilization mix, and credit consumption metrics.

These factors could lead to upside potential in Wix's roughly 60% second-half gross-margin framework as the company internalizes inference economics. However, any margin upside is expected to be reinvested into customer acquisition rather than directly impacting near-term operating income or free cash flow. Analysts project a free cash flow yield of 12% based on Wix's valuation, with profitability expected this year.

The Partners channel is identified as the primary risk, with a $50 million bookings headwind that has not worsened significantly, primarily affecting smaller agencies and freelancers. Symphony's early usage shows promise, while headless adoption through AI and large language models is increasing but remains modest. Wix's unit economics for Base44 are improving faster than anticipated, and 2027 estimates still require durable retention, Partners stabilization, and a degree of moderation in sales and marketing reinvestment.

Wix.com reported better-than-expected second-quarter results, with adjusted earnings per share of $1.59, surpassing the estimate of $1.16. Revenue reached $563.1 million, exceeding the expected $556.0 million, and bookings increased by 12%, driven by demand for AI-powered products. Despite mixed reactions from analysts, all firms acknowledged the earnings beat and noted Wix's adjusted free cash flow of $61 million, surpassing the estimated $36 million.