In the latest trading session, Wix.com (WIX) closed at $73.79, marking a -4.82% move from the previous day. This change lagged the S&P 500's 0.51% gain on the day. Meanwhile, the Dow gained 0.93%, and the Nasdaq, a tech-heavy index, added 0.48%.
The cloud-based web development company's stock has dropped by 9.6% in the past month, falling short of the Computer and Technology sector's gain of 6.54% and the S&P 500's gain of 0.74%.
Investors will be eagerly watching for the performance of Wix.com in its upcoming earnings disclosure. The company is expected to report EPS of $1.32, down 21.43% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $566.94 million, up 12.22% from the year-ago period.
For the full year, the Zacks Consensus Estimates project earnings of $4.28 per share and a revenue of $2.26 billion, demonstrating changes of -41.53% and +13.29%, respectively, from the preceding year.
It is also important to note the recent changes to analyst estimates for Wixcom. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Wix.com currently has a Zacks Rank of #3 (Hold).
From a valuation perspective, Wix.com is currently exchanging hands at a Forward P/E ratio of 18.13. Its industry sports an average Forward P/E of 12.92, so one might conclude that Wix.com is trading at a premium comparatively.
One should further note that WIX currently holds a PEG ratio of 2.05. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computers - IT Services industry currently had an average PEG ratio of 1.38 as of yesterday's close.
The Computers - IT Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 101, which puts it in the top 42% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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Wix.com Ltd. (WIX): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).