The website builder Wix has built a high-growth business with sound financials unlike other technology and internet companies.

Recent volatility has sold off the stock heavily from its highs despite meeting management expectations.

This article explains how the fair value of the company points to upside of up to 40% over the next year.


As volatility becomes vogue once again, the market has begun to washout a wave of companies that were overvalued – alarmingly so in many cases. The variety of factors driving lofty valuations have been discussed frequently on Seeking Alpha, with some combination of tax cuts, economic cyclicality, and poor yield alternatives being popular and well sourced arguments. Given the turn in the market – dare we say the transition to a bear market or correction – the companies that were carried by macro factors and not sound fundamentals, are selling off at sharp rates. Earnings reports merely meeting guidance are getting hammered, leaving investors scratching their heads on how their 401K can be down on the year. Ltd (WIX) is not one of these companies.

With a strong and innovative platform to leverage thanks to heavy R&D investment, has firmly established itself as a leader in its space. Unlike some competitors that have been pigeonholed in a nice such as Shopify (SHOP) which targets itself toward an e-commerce market, Wix has positioned itself to serve not only e-commerce, but has taken strides to capture bloggers and small businesses alike. While a website developed from scratch may win in functionality in side-by-side comparison if a business has unique needs, Wix can likely produce similar functionality for less than the cost of the developer’s billable hours for a single day of coding. This is a powerful argument for adoption of the platform and the primary driver of why the company has found success to date. Continue reading to see why the current valuation of Wix is too low and deserves a look by prudent investors.