Wix.com (WIX) Soars 5.8%: Is Further Upside Left in the Stock?

Wix.com WIX shares rallied 5.8% in the last trading session to close at $93.04. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 15% loss over the past four weeks.

Shares surged on the announcement of Wix’s new buyback authorization, which underscores its strong cash flow generation and commitment to shareholder returns. The company will repurchase securities (ordinary shares and/or convertible notes) up to $2 billion over the next two years. 

This cloud-based web development company is expected to post quarterly earnings of $1.36 per share in its upcoming report, which represents a year-over-year change of -29.5%. Revenues are expected to be $528.03 million, up 14.7% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Wix.com, the consensus EPS estimate for the quarter has been revised 0.6% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on WIX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Wix.com belongs to the Zacks Computers - IT Services industry. Another stock from the same industry, Leidos LDOS, closed the last trading session 0.3% higher at $187.77. Over the past month, LDOS has returned 2.1%.

For Leidos, the consensus EPS estimate for the upcoming report has changed +2% over the past month to $2.57. This represents a change of +8.4% from what the company reported a year ago. Leidos currently has a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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