How to buy Wix.com (WIX) stock
Founded in 2006, WIX is an Israeli-based company that provides a cloud-based platform, enabling customers to create a website or web application. WIX is one of the leading, global web development platforms with 215M total registered users. The company has a 2.9% market share in the website building industry worldwide, which is behind only Shopify and WordPress.
How to buy WIX stock for beginners?
Before you can start purchasing WIX stocks, you need to select a brokerage account to do it through. You can choose to go with a trading platform offered by a traditional financial company like Fidelity, Vanguard or Schwab, or you can look at online brokers like eToro, Ally Invest or Robinhood. Most online broker allow fractional shares to be trade, don’t charge any trading commissions on stocks and have no account minimum to get started. So you can buy a partial share and build your wealth by adding to your investments over time. This can allow you to take advantage of dollar-cost averaging, a process that spreads your buying over time and reduces your risk.
Picking out individual stocks requires much more education than investing in diversified assets like index funds. Before buying stock in a company like Wix or any other, understand what that company does, the product(s) it offers, its business model, how it makes money and its historical performance. So you’ll need to read through its filings with the Securities and Exchange Commission (SEC). That will give you lots of detail about what you’re investing in and its potential.
I prefer a strategy of drip-feeding money into your investments evenly over time, which helps you to be somewhat protected, thanks to dollar cost averaging (DCA). By adopting this approach, you buy more shares when prices are low and fewer when prices are high. If you don’t want to spend the time following specific stock, you could choose to go with an investment fund. then dollar-cost average into index funds.
Should you invest in Wix.com?
Wix was the brainchild of three founders who decided to build a platform that simplifies website creation. WIX's strength is the idea of 'one-stop shopping' with its breadth and integration of various web uses. WIX also adopts an unstructured web building concept to empower users with more freedom. Wix customers can now build e-commerce stores, manage online payments and business workflows, create professional videos, develop a more sophisticated and customized website, and more. And the idea caught on as Wix quickly reached a million users by 2009, three years after its founding. Fast-forward to 2022 and the platform now has 222 million registered users.
However, specialized web builders like Shopify or Squarespace have better and more focused solutions. They can win customers who focus on e-commerce or art/photography. Diversification or specialization? It is tough to tell which one works better for the web builder market?
In 2021, creative subscriptions revenue grew 21% year over year to $950.3 million with a 76% gross margin. Even though Wix is operating at around break-even right now, management says this segment is doing 20%-plus free cash flow margin right now. However, WIX is not the only web builder out there. WordPress, Shopify (NYSE:SHOP), Weebly (Square Store) and Squarespace (NYSE:SQSP) are also popular platforms and growing fast.
Is WIX stock a buy now?
WIX shares were currently trading at $73.51 per share as of March 5, 2022. The stock price is down around 54% this year, while the broad market S&P 500 index is up roughly 10%. With the stock down so much this year, Wix is now trading at a reasonable valuation based on its forward sales estimates. However, as long as the business quality hasn't changed, large drops in the share price can provide buying opportunities for investors with a long-term time horizon.
The stock has a forward price-to-sales ratio (P/S) of 3.96. If it can keep up its consolidated gross margin of 62%, that puts the company's forward price-to-gross-profit (P/GP) at 4.3, or lower than the market average. This is much too cheap for a company that has consistently grown its top line at a double-digit rate and has a clear path to increase its 2.9% market share in website building over the next decade.
Based on 15 analysts offering recommendations for DLTR in the last 3 months, the overall consensus is Moderate Buy. There are currently 0 (0%) sell rating, 5 (33%) hold ratings and 10 (67%) buy ratings for the stock. On average, Wall Street analysts predict that Dollar Tree's share price could reach $137.5 in the next twelve months, with a high estimate of $250 and a low estimate of $85. The median estimate represents a +87.05% increase from the current price of $73.51.
