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. The US$5.9b market-cap company's loss lessened since it announced a US$425m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$8.8m, as it approaches breakeven. As path to profitability is the topic on Wix.com's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts' expectations for the company.
See our latest analysis for Wix.com
Wix.com is bordering on breakeven, according to the 18 American IT analysts. They expect the company to post a final loss in 2022, before turning a profit of US$29m in 2023. So, the company is predicted to breakeven approximately a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 50%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
NasdaqGS:WIX Earnings Per Share Growth December 11th 2023
Given this is a high-level overview, we won't go into details of Wix.com's upcoming projects, but, bear in mind that by and large 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. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. 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 relevant aspects you should further examine:
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.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. 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.
