Wix has gotten torched over the last six months - since December 2025, its stock price has dropped 56% to $45.50 per share. This was partly driven by its softer quarterly results and may have investors wondering how to approach the situation.
Is there a buying opportunity in Wix, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Is Wix Not Exciting?
Even with the cheaper entry price, we don’t have much confidence in Wix. Here are three reasons we avoid WIX, plus one 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 $585 million in Q1, and over the last four quarters, its year-on-year growth averaged 13.8%. This performance slightly lagged the sector and suggests that increasing competition is causing challenges in acquiring/retaining customers. 
2. Shrinking Operating Margin
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 metric shows how much revenue remains after accounting for all core expenses — everything from the cost of goods sold to sales and R&D.
Looking at the trend in its profitability, Wix’s operating margin decreased by 12.2 percentage points over the last two years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Wix’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers. Its operating margin for the trailing 12 months was negative 5.1%.
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 27.9% for the last 12 months will decrease to 19.6%.
Final Judgment
Wix isn’t a terrible business, but it doesn’t pass our bar. After the recent drawdown, the stock trades at 1.1× forward price-to-sales (or $45.50 per share). This valuation is reasonable, but the company’s shakier fundamentals present too much downside risk. We’re fairly confident there are better stocks to buy right now. We’d suggest looking at the most dominant software business in the world.
Stocks We Like More Than Wix
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