Wix.com Ltd. (NASDAQ:WIX) shareholders should be happy to see the share price up 15% in the last quarter. But that is small recompense for the exasperating returns over three years. Indeed, the share price is down a tragic 69% in the last three years. So it's good to see it climbing back up. After all, could be that the fall was overdone.
If the past week is anything to go by, investor sentiment for Wix.com isn't positive, so let's see if there's a mismatch between fundamentals and the share price.
Check out our latest analysis for Wix.com
Because Wix.com made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Over three years, Wix.com grew revenue at 17% per year. That's a pretty good rate of top-line growth. So some shareholders would be frustrated with the compound loss of 19% per year. To be frank we're surprised to see revenue growth and share price growth diverge so strongly. So this is one stock that might be worth investigating further, or even adding to your watchlist.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. You can see what analysts are predicting for Wix.com in this interactive graph of future profit estimates.
A Different Perspective
Wix.com shareholders gained a total return of 3.3% during the year. But that was short of the market average. But at least that's still a gain! Over five years the TSR has been a reduction of 0.9% per year, over five years. So this might be a sign the business has turned its fortunes around. It's always interesting to track share price performance over the longer term. But to understand Wix.com better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Wix.com you should be aware of.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
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.