Wix.com Ltd. develops and markets an Internet service that allows users to create Web content. It offers Web development, design, and management solutions and apps through an online platform that enables its user base of businesses, organizations, professionals, and individuals to create digital presence. The company was founded in 2006 and is based in Tel Aviv, Israel.
WIX Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Wixcom Ltd with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Wixcom Ltd ranked in the 63th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. As for the metrics that stood out in our discounted cash flow analysis of Wixcom Ltd, consider:
The business' balance sheet reveals debt to be 3% of the company's capital (with equity being the remaining amount). Approximately merely 10.59% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
Wixcom Ltd's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -37.19. This coverage rate is greater than that of just 3.67% of stocks we're observing for the purpose of forecasting via discounted cash flows.
As a business, Wixcom Ltd experienced a tax rate of about 0% over the past twelve months; relative to its sector (Technology), this tax rate is higher than merely 0% of stocks generating free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Technology that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as WIX, try ERIC, GENH, Z, COUP, and CSGS.
Wix (WIX) is in the right place at the right time. The company has a proven track record of execution, generating consistent performance over the long term. Demand is now accelerating due to the pandemic, and Wix is aggressively investing in marketing and advertising to consolidate its market position and...
Andres Cardenal, CFA on Seeking Alpha | September 29, 2020
Spree Capital Advisers recently released its Q2 2020 Investor Letter, a copy of which you can download here. The fund posted a return of -12.41% in the first half of 2020, underperforming its benchmark, the S&P 500 which returned -3.1% in the same period. You should check out Spree Capital's top 5 stock picks for […]
MPE Capital recently released its Q2 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 10.8% in the first half of 2020, outperforming its benchmark, the S&P 500 which returned -3.1% in the same period. You should check out MPE Capital's top 5 stock picks for investors […]