Wix.com Ltd. (WIX Quick QuoteWIX - Free Report) shares have witnessed a sharp decrease of 30.7% in the past three months, which is steeper than the 18.3%, 15.4% and 10.2% declines for the Computer IT Services Industry, the broader Zacks Computer and Technology Sector and the S&P 500 composite, respectively.

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The stock has been on a decline since reporting fourth-quarter 2024 results on Feb. 19. WIX’s commentary surrounding the increased forex volatility may have sparked investors’ concerns. Moreover, the recent price decline is mainly due to a broader market sell-off amid escalating trade tensions, and the possibilities of supply-chain disruptions and global recession. 

Investors, who are on edge amid global market uncertainty, are now reassessing their portfolios. Let us discuss the pros and cons of WIX and ascertain the best course of action for your portfolio.

WIX’s Focus on AI to Power Top-Line Growth

WIX is focusing on generative AI as it represents a significant business growth driver. The launch of the AI Website Builder in 2024 has provided users with a transformative experience and is now the mainstay of WIX’s AI portfolio. More than one million sites have been created and published using AI Website Builder. This innovative product is strengthening Wix’s competitive position as it enhances conversion rates and drives increased purchase behavior, which is crucial for long-term revenue expansion. 

It continues to add new products to capitalize on the AI boom. In January 2025, Wix unveiled Business Launcher, an AI-driven tool designed to help users transform new business ideas into reality, from concept to execution. The tool analyzes users' skills, experience and goals to generate personalized business ideas with just a few questions or by uploading a resume. In December 2024, Wix launched its first monetized product, AI Site-Chat, a virtual agent that helps businesses engage visitors 24/7, addresses queries and provides real-time info. It improves customer experience and boosts potential sales. 

WIX is also embedding AI assistants across its platform. New AI-business assistants are improving operational efficiency and customer conversion rates. Its specialized AI Marketing Agent is currently in the early rollout stages. It recently unveiled Astro, an AI-powered business assistant, designed to enhance user productivity and streamline business operations. This innovative tool allows users to interact through a chat-based interface to perform a wide range of business and back-office tasks effortlessly. Astro represents the first in a series of AI-driven agents Wix plans to introduce, setting the foundation for increased efficiency, better monetization and business growth for users.

WIX Studio & Other Growth Catalysts 

WIX Studio, the company’s premium offering for agencies and professionals, currently has more than two million accounts, with 75% created by new Partners, forming a vibrant community of creative professionals. The platform’s compelling features and efficiency have made it the foremost choice for larger projects. 
Product innovation is driving conversion across both Self Creators and Partners channels.

Self-Creators’ business witnessed increasing growth in 2024, driven by WIX’s AI-product suite. WIX added that it was working on a product that would expand “powerful design capabilities beyond just websites” and is expected to launch around spring. The other solution will aid Sales Creators to build their presence on the Internet and is anticipated to roll out in early fall. For the Partners business, WIX also has an innovative product lineup for 2025. The company will add new advanced design tools and integrations with business applications to the Studio Platform, which are expected to further fuel growth in this segment.

Robust activity in the commerce segment further contributed to bookings and revenue acceleration. Bookings were up 15% in 2024. The continued evolution of AI and Studio offerings is expected to drive revenue growth. AI-powered solutions will not only enhance user experience but also create opportunities for direct monetization, providing a significant tailwind for 2025 and beyond. 

Also, WIX’s strategy on onboarding higher intent users and maximizing the lifetime value of its current user base, along with targeting marketing, bodes well. The company observed that its first quarter 2024 cohort generated $61 million in cumulative bookings through the first four quarters, second only to the first quarter of 2021 cohort, which gained from COVID pandemic-related tailwinds. 

Wix is committed to balancing sustainable revenue growth with improved operating efficiencies. The company aims to achieve "Rule of 45" at the high end of its 2025 outlook, a financial strategy that integrates revenue growth rate and profit margin. Strong execution in AI, Studio and operational cost management is likely to drive higher margins and record profitability.

Forex Volatility Concerning for WIX

Approximately 40% of Wix’s revenues are generated in non-U.S. dollar currencies, making it susceptible to foreign exchange fluctuations. The company experienced unfavorable forex impacts in the middle of the fourth quarter of 2024 and spanning till early 2025, mainly due to the strengthening U.S. dollar against the euro and British pound. 

Based on late January spot rates, Wix expects significant forex headwinds to weigh on its 2025 outlook. Wix expects 2025 total bookings of $260 million, growing 11-13% year over year. Forex headwinds, mainly from U.S. dollar to euro and British pound changes, are forecasted at $45 million for the year. It projects 14-16% revenue growth for 2025 on a constant currency basis. 

However, due to a $34 million forex impact, growth on a reported basis is expected to be 12-14%. For the first quarter of 2025, revenues are expected to be between $469 million and $473 million, indicating 12-13% growth from the prior-year quarter's reported figure and 13-14% at cc, including roughly $6 million of adverse forex impact. Stiff competition and increasing expenses are additional headwinds. 

Conclusion: Hold WIX for Now

With an expanding AI-product suite and increasing Studio adoption, Wix is well-positioned to capitalize on long-term opportunities. However, increasing costs and forex volatility could put downward pressure on the stock. Broader market uncertainty and supply-chain disruptions could further escalate costs, which will weigh on the margins. 

Investors need to wait for a favorable entry point at the moment, but investors already owning the stock can stay put given strong fundamentals. 

WIX carries a Zacks Rank #3 (Hold) at present.

Stocks to Consider in Computers - IT Services Space

Some better-ranked stocks from the broader technology space are C3.ai, Inc. (AI Quick QuoteAI - Free Report) , Jack Henry & Associates, Inc. (JKHY Quick QuoteJKHY - Free Report) and Science Applications International Corporation (SAIC Quick QuoteSAIC - Free Report) . AI, JKHY and SAIC carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for AI’s fiscal 2025 EPS is pegged at a loss of 47 cents, unchanged in the past seven days. C3.ai’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 60.1%. Its shares have plunged 9.5% in the past year.

The Zacks Consensus Estimate for Jack Henry’s fiscal 2025 EPS is pegged at $5.85, unchanged in the past seven days Jack Henry’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 3.07%. The company’s long-term earnings growth rate is 8.6%. Its shares have inched up 1.6% in the past year.

Science Applications’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing in one, with the average surprise being 14.62%. In the last reported quarter, SAIC delivered an earnings surprise of 28.5%. Its shares have lost 8.6% in the past year.