By Sam Boughedda
Credit Suisse initiated coverage of Wix.com (NASDAQ:WIX) with an Outperform rating and $105 price target on Friday, stating that margins are now in the driver's seat.
"Wix not only offers a compelling suite of no/low-code web development tools but has also built out a robust suite of business and commerce solutions," said Credit Suisse analysts.
They add that Wix remains in the early days of benefitting from what they believe will be "one of the most important investment themes" within the firm's Payments & FinTech coverage over the coming decade.
They explained that these are "the intersection of software and payments, with embedded monetization- and ecosystem-enhancing financial services as well as commerce enablement solutions."
"After heavy investments in the past ~4 years, we believe Wix is on the cusp of regaining and expanding its EBIT & FCF margins over the coming years with a strong commitment to cost discipline, which should support its share price despite the macro weakness," added the analysts.
Beyond the near term, Credit Suisse believes the still low penetration of SaaS CMS in a fragmented web tools and commerce enablement market will support Wix's growth persistence. Zhang states that the firm sees potential upside to the shares if Wix gains further traction in its Commerce and Partners business.