3 Reasons to Avoid WIX and 1 Stock to Buy Instead

Wix’s stock price has taken a beating over the past six months, shedding 40.9% of its value and falling to $77.67 per share. This was partly due to its softer quarterly results and might have investors contemplating their next move.

Is there a buying opportunity in Wix, or does it present a risk to your portfolio? Get the full stock story straight from our expert analysts, it’s free.

Why Is Wix Not Exciting?

Even though the stock has become cheaper, we're sitting this one out for now. Here are three reasons why WIX doesn't excite us and a stock we'd rather own.

1. Weak Billings Point to Soft Demand

Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.

Wix’s billings came in at $514.5 million in Q3, and over the last four quarters, its year-on-year growth averaged 13.7%. This performance slightly lagged the sector and suggests that increasing competition is causing challenges in acquiring/retaining customers.

2. Operating Margin Rising, Profits Up

Many software businesses adjust their profits for stock-based compensation (SBC), but we prioritize GAAP operating margin because SBC is a real expense used to attract and retain engineering and sales talent. This is one of the best measures of profitability because it shows how much money a company takes home after developing, marketing, and selling its products.

Looking at the trend in its profitability, Wix’s operating margin rose by 1.9 percentage points over the last two years, as its sales growth gave it operating leverage. Its operating margin for the trailing 12 months was 5.7%.

3. Cash Flow Margin Set to Decline

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

Over the next year, analysts predict Wix’s cash conversion will fall. Their consensus estimates imply its free cash flow margin of 30.1% for the last 12 months will decrease to 25.8%.

Final Judgment

Wix isn’t a terrible business, but it doesn’t pass our quality test. After the recent drawdown, the stock trades at 2.1× forward price-to-sales (or $77.67 per share). While this valuation is fair, the upside isn’t great compared to the potential downside. We're fairly confident there are better stocks to buy right now. We’d suggest looking at our favorite semiconductor picks and shovels play.

High-Quality Stocks for All Market Conditions

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.