Investors Heavily Search Wix.com Ltd. (WIX): Here is What You Need to Know

Wix.com (WIX) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.Over the past month, shares of this cloud-based web development company have returned -19.2%, compared to the Zacks S&P 500 composite's +1.3% change. During this period, the Zacks Computers - IT Services industry, which Wix.com falls in, has gained 2.5%. The key question now is: What could be the stock's future direction?While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.Wix.com is expected to post earnings of $1.45 per share for the current quarter, representing a year-over-year change of -3.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +11.8%.The consensus earnings estimate of $6.74 for the current fiscal year indicates a year-over-year change of +5.5%. This estimate has changed +3% over the last 30 days.For the next fiscal year, the consensus earnings estimate of $7.55 indicates a change of +12% from what Wix.com is expected to report a year ago. Over the past month, the estimate has changed -1%.With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Wix.com.The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:12 Month EPSRevenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.For Wix.com, the consensus sales estimate for the current quarter of $502.65 million indicates a year-over-year change of +13%. For the current and next fiscal years, $1.99 billion and $2.25 billion estimates indicate +13.1% and +13.1% changes, respectively.Last Reported Results and Surprise HistoryWix.com reported revenues of $489.93 million in the last reported quarter, representing a year-over-year change of +12.4%. EPS of $2.28 for the same period compares with $1.67 a year ago.Compared to the Zacks Consensus Estimate of $487.46 million, the reported revenues represent a surprise of +0.51%. The EPS surprise was +30.29%.Over the last four quarters, Wix.com surpassed consensus EPS estimates three times. The company topped consensus revenue estimates three times over this period.ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.Wix.com is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Wix.com. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Wix.com Ltd. (WIX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks