Wix.com’s stocks may have plummeted, but the company’s future is still bright according to analysts.
A recent sell off of Wix.com’s stock left the company’s shares trading at below their IPO Level. Now the company hopes that the addition of plumbers and hairdressers to its services will help it make a comeback.
Traditional forms of advertising for small businesses, such as the yellow pages, have become obsolete. Now local plumbers and the like know that they need to develop their own web sites in order to compete. People today go on line to find a service by performing web searches and expect the business to have a web site.
After Wix raised $127 million in its NASDAQ IPO last year, the company’s stock almost doubled in less than four months. But this was followed by what it called adverse market conditions. Its stock is currently trading at $15.42, down from a high of $31.
In March the company was forced to withdraw a registration statement on Form F-1 it had filed for the proposed public offering of ordinary shares by it and certain selling shareholders.
This, however, has not left market analysts discouraged as to Wix’s future growth.
Kerry Rice of Needham and Co., whose firm has placed a buy rating on Wix shares, told Bloomberg, “There’s been a sell-off of growth names and that’s hurt Wix. But if you look at the company’s fundamentals, they’re very strong. They have a subscription model with a lot of visibility. I don’t expect them to see a downward slide in growth.”
The optimism may be the result of the fact that Wix’s 2014 earnings forecast, announced earlier this month, beat the estimates and its sales have nearly doubled in each of the past two years.
At the end of this year’s first quarter, Wix had 46.2 million users, an increase of almost ten percent for the year. Its sales are expected to climb to $187 million by 2015, according to a survey by Bloomberg.
Some analysts see the company rising to 150 million users by 2019.
Wix’s woes, according to financial experts, are not the result of its revenue streams. The company, they say, is suffering from a recent general sell off of Internet company stocks.
Last week Wix announced that its co-founder and CEO, Avishai Abrahami, and its president and COO, Nir Ziohar, will make a presentation at the Bank of America Merril Lynch 2014 Global Technology Conference to be held in San Francisco in June.
Founded in 2006 and based in Tel Aviv, Wix is a cloud based web development company. Its users can create professional web sites and mobile sites by using the company’s on line drag and drop tools. Wix currently employs 648 people.
The company uses the freemium business model: its basic service is free, but users pay for premium upgrades which include extra data storage and bandwidth and the removing of Wix ads providing it with its revenue stream.
Wix’s has offices in San Francisco, New York, Vilnius and Dnepropetrovsk.