We assign a fundamental rating of 5 out of 10 to WIX. WIX was compared to 88 industry peers in the IT Services industry. Both the profitability and the financial health of WIX get a neutral evaluation. Nothing too spectacular is happening here. WIX is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one!

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

WIX had positive earnings in the past year.
In the past year WIX had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: WIX reported negative net income in multiple years.
In the past 5 years WIX always reported a positive cash flow from operatings.

1.2 Ratios

Looking at the Return On Assets, with a value of 5.43%, WIX is in the better half of the industry, outperforming 70.45% of the companies in the same industry.
WIX has a Return On Invested Capital of 6.66%. This is in the better half of the industry: WIX outperforms 65.91% of its industry peers.

		Industry Rank	Sector Rank
ROA	5.43%
ROE	N/A
ROIC	6.66%

ROA(3y)-5.03%

ROA(5y)-5.92%

ROE(3y)N/A

ROE(5y)N/A

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

Looking at the Profit Margin, with a value of 7.20%, WIX is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
Looking at the Operating Margin, with a value of 5.72%, WIX is in line with its industry, outperforming 59.09% of the companies in the same industry.
WIX has a Gross Margin of 68.45%. This is amongst the best in the industry. WIX outperforms 89.77% of its industry peers.
WIX's Gross Margin has declined in the last couple of years.

		Industry Rank	Sector Rank
OM	5.72%
PM (TTM)	7.2%
GM	68.45%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y3.36%

GM growth 5Y-1.77%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), WIX is destroying value.
WIX has less shares outstanding than it did 1 year ago.
WIX has more shares outstanding than it did 5 years ago.
The debt/assets ratio for WIX has been reduced compared to a year ago.

2.2 Solvency

An Altman-Z score of 1.84 indicates that WIX is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 1.84, WIX is not doing good in the industry: 61.36% of the companies in the same industry are doing better.
WIX has a debt to FCF ratio of 2.09. This is a good value and a sign of high solvency as WIX would need 2.09 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.09, WIX is doing good in the industry, outperforming 70.45% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	N/A
Debt/FCF	2.09
Altman-Z	1.84

ROIC/WACC0.8

WACC8.3%

2.3 Liquidity

WIX has a Current Ratio of 1.62. This is a normal value and indicates that WIX is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.62, WIX is in line with its industry, outperforming 48.86% of the companies in the same industry.
A Quick Ratio of 1.62 indicates that WIX should not have too much problems paying its short term obligations.
WIX has a Quick ratio (1.62) which is in line with its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.62
Quick Ratio	1.62

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 30.99% over the past year.
The Earnings Per Share has been growing by 40.43% on average over the past years. This is a very strong growth
Looking at the last year, WIX shows a quite strong growth in Revenue. The Revenue has grown by 13.22% in the last year.
The Revenue has been growing by 18.37% on average over the past years. This is quite good.

EPS 1Y (TTM)30.99%

EPS 3YN/A

EPS 5Y40.43%

EPS Q2Q%12%

Revenue 1Y (TTM)13.22%

Revenue growth 3Y11.51%

Revenue growth 5Y18.37%

Sales Q2Q%13.61%

3.2 Future

The Earnings Per Share is expected to grow by 11.78% on average over the next years. This is quite good.
WIX is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 12.25% yearly.

EPS Next Y7.12%

EPS Next 2Y3.58%

EPS Next 3Y9.51%

EPS Next 5Y11.78%

Revenue Next Year13.31%

Revenue Next 2Y13.72%

Revenue Next 3Y13.58%

Revenue Next 5Y12.25%

3.3 Evolution

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 12.51, which indicates a correct valuation of WIX.
Based on the Price/Earnings ratio, WIX is valued cheaply inside the industry as 81.82% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 28.60, WIX is valued rather cheaply.
The Price/Forward Earnings ratio is 13.57, which indicates a correct valuation of WIX.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WIX indicates a somewhat cheap valuation: WIX is cheaper than 78.41% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.83, WIX is valued a bit cheaper.

		Industry Rank	Sector Rank
PE	12.51
Fwd PE	13.57

4.2 Price Multiples

WIX's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, WIX is valued cheaply inside the industry as 88.64% of the companies are valued more expensively.