Morgan Stanley Downgrades Wix.com (WIX) to Equalweight

Morgan Stanley analyst Elizabeth Elliott downgraded Wix.com (NASDAQ: WIX) from Overweight to Equalweight with a price target of $60.00 (from $112.00).

The analyst comments: “We are moving Wix to Equal-weight from Overweight because our prior constructive thesis – the prospect for growth durability plus increased operating discipline expanding margins and compounding FCF generation – has become harder to underwrite. While new initiatives in Base44 and Wix Harmony are showing promising greenshoots, Wix has not yet proven these innovations can inflect the overall growth profile. Specifically, Base44 reached ~ $150M ARR by mid-May, up from ~$100M in early March, and Harmony is showing encouraging early cohort data. Yet, consolidated bookings growth for FY26 has moved from mid-teens to low-teens, and revenue growth from mid-teens to low-to mid-teens, as FY26 bookings / revenue are now expected to be reduced by ~$50M / ~$25M from the organizational realignment and a more pronounced Partners slowdown. This disconnect raises a more fundamental question around the health of the core website-building business.

Specifically, given Base44 is ramping this quickly against an overall topline that is failing to inflect, it appears that the core business may be absorbing more pressure and / or substitution impacts than we previously appreciated. While we believe timing and macro are likely factors here, management’s commentary also points to a faster-moving structural shift in the online creation ecosystem, particularly in Partners. Per management, large agencies are still growing at healthy rates, but smaller designers and partners are seeing weaker project pipelines and softer demand, contributing to the slowdown in Partners growth ( Exhibit 1 ). Whether cyclical or structural, the reduced visibility in the partner funnel weakens confidence in the durability of consolidated growth.”

For an analyst ratings summary and ratings history on Wix.com click here. For more ratings news on Wix.com click here.

Shares of Wix.com closed at $53.36 yesterday.

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