Wix.com Ltd. (NASDAQ:WIX) shares plunged about 30 percent after the web development company reported first-quarter revenue and profit that failed to meet analyst expectations, fueling concerns about its growth trajectory.
The results missed Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of $1.21 per share on revenue of $543.8 million.
The company posted a net loss of $57.5 million, or $1.02 per share, for the quarter. While revenue increased 14 percent year-over-year, the non-GAAP earnings per share represented a 56 percent decrease from the same period a year ago.
The sharp decline in its stock price reflects investor concern over slowing growth and operational hurdles. The company cited challenges in its Partners business and product rollout delays, partly impacted by the conflict in the Middle East, as headwinds.
Despite the quarterly miss, Wix reaffirmed its full-year 2026 forecast. The company is banking on strategic growth initiatives and the continued rollout of AI-driven products, such as Harmony and Base44, to navigate the current challenges. However, management adjusted its free cash flow margin expectations for the full year to the "high teens," down from a potential low- to mid-20 percent range, attributing the revision to interest expenses from recent share buybacks and currency headwinds.
The stock's 30 percent drop marks its worst single-day performance in over two years, wiping out nearly a third of the company's market capitalization. The earnings miss and subsequent sell-off place a greater focus on the company's ability to execute its AI strategy and stabilize its Partners segment. Investors will be closely watching for signs of recovery in the second-quarter report, expected in August.
This article is for informational purposes only and does not constitute investment advice.
