May 16, 2022
The stock has lost more than 55% YTD.
Wix remains on a bearish market but the stock is attractive.
Wix.com Ltd. (NASDAQ:WIX) lost 8% on Monday after Q1 2022 loss widened to $227.3 million. The loss is wider compared to $62.1 million in the prior year. The company also continues to face headwinds from the Ukrainian war. The uncertainty clouds outlook for a long-term recovery of the stock. The stock is down 55% year-to-date.
Nonetheless, Wix’s revenues came at $341.6 million. The revenue was 14% higher than last year and better than estimates of $340.55 million. Wix forecasts a $342-$346 million revenue in the second quarter.
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Wix facilitates the creation of professional websites without requiring users to write code. Users can also perform other activities, including online payments, scheduling, and fulfillment. These are segments with a lot of growth potential but high competition as well. If Wix continues to generate strong revenue growth, the stock is very attractive at the $71 level.
Wix remains below the descending trendline
Source – TradingView
Technically, Wix has escaped the oversold bottom of $58, where the RSI touched 27. The stock has been gaining before the quarterly results. However, it still trades below the ascending trendline.
With the mixed earnings, Wix will face pressure to recover from the oversold bottom. The stock is a hold up to the ascending trendline and/or around potential resistance at $82.
Hold Wix stock despite the mixed earnings as the revenue outlook remains strong. The stock will potentially face resistance at $82 or at the descending trendline. Wider losses and an uncertain operating environment are headwinds to long-term recovery.
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