Baird downgrades Wix, says recent rally leaves ‘less attractive’ setup

Investing.com -- Baird has downgraded Wix.com to Neutral, warning that the stock’s near-50% surge over the past two weeks has left “the opportunity less attractive” in the near term.

Analyst Vikram Kesavabhotla noted that Wix shares have jumped “+49.5% in the past two weeks vs. S&P 500 -1.4%,” a move he said reflects aggressive share repurchases and a strong fourth-quarter print.

However, Baird argued that investors may now be reluctant to add exposure as the company enters what it calls “a year of investments in F26.”

Kesavabhotla wrote that Wix’s fiscal 2026 guide includes a “wider-than-normal range,” with Base44 remaining “the largest variable.”

As that business scales, it brings “higher incremental AI and marketing costs,” leading management to guide to “significant FCF margin compression in F26.”

Baird believes this investment could be positive long term, but added that “we find the uncertainty in the near term less appealing.”

The firm also highlighted lingering skepticism about Base44’s value. “Sentiment remains mixed on the long-term value of Base44,” the note said, adding that Wix must still prove it can “scale this asset efficiently.”

In an AI-driven market, Baird warned that Wix “is still representative of the type of business that investors are growing increasingly concerned about.”

While Baird acknowledged there are scenarios where the stock could outperform, it said the recent rally means “it may be hard to move the needle substantially from here.”

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