Taking everything into account, WIX scores 5 out of 10 in our fundamental rating. WIX was compared to 88 industry peers in the IT Services industry. WIX has only an average score on both its financial health and profitability. 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

In the past year WIX was profitable.
WIX had a positive operating cash flow in the past year.
In multiple years WIX reported negative net income over the last 5 years.
WIX had a positive operating cash flow in each of the past 5 years.

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.
Looking at the Return On Invested Capital, with a value of 6.66%, WIX is in the better half of the industry, outperforming 65.91% of the companies in the same industry.

		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

WIX has a better Profit Margin (7.20%) than 75.00% of its industry peers.
The Operating Margin of WIX (5.72%) is comparable to the rest of the industry.
Looking at the Gross Margin, with a value of 68.45%, WIX belongs to the top of the industry, outperforming 89.77% of the companies in the same industry.
In the last couple of years the Gross Margin of WIX has declined.

		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

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

2.2 Solvency

WIX has an Altman-Z score of 1.75. This is a bad value and indicates that WIX is not financially healthy and even has some risk of bankruptcy.
WIX's Altman-Z score of 1.75 is on the low side compared to the rest of the industry. WIX is outperformed by 61.36% of its industry peers.
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.
Looking at the Debt to FCF ratio, with a value of 2.09, WIX is in the better half of 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	1.75

ROIC/WACC0.46

WACC14.5%

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.
WIX has a Current ratio (1.62) which is in line with its industry peers.
WIX has a Quick 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.
WIX has a Quick ratio (1.62) which is comparable to the rest of the industry.

		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.
Measured over the past years, WIX shows a very strong growth in Earnings Per Share. The EPS has been growing by 40.43% on average per year.
The Revenue has grown by 13.22% in the past year. This is quite good.
Measured over the past years, WIX shows a quite strong growth in Revenue. The Revenue has been growing by 18.37% on average per year.

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

Based on estimates for the next years, WIX will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.78% on average per year.
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 2Y3.31%

EPS Next 3Y10.07%

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

With a Price/Earnings ratio of 11.89, the valuation of WIX can be described as very reasonable.
WIX's Price/Earnings ratio is rather cheap when compared to the industry. WIX is cheaper than 87.50% of the companies in the same industry.
WIX is valuated cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 12.97, the valuation of WIX can be described as correct.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WIX indicates a rather cheap valuation: WIX is cheaper than 81.82% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of WIX to the average of the S&P500 Index (24.26), we can say WIX is valued slightly cheaper.

		Industry Rank	Sector Rank
PE	11.89
Fwd PE	12.97

4.2 Price Multiples

WIX's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, WIX is valued cheaper than 90.91% of the companies in the same industry.