Wix.com Ltd. (WIX)

Wix.com Ltd. ( WIX -3.13%↓ ) enters 2026 at a genuine inflection point. The stock’s ~50% drawdown through 2025 reflects a single dominant fear. The “Chegg Outcome”, where open-ended LLMs commoditise incumbent software and users bypass the UI entirely. On that framing, a website builder becomes an anachronism, and the equity deserves a permanently lower multiple.

Our view is that this fear is reductive. Wix is'n’t positioning itself as “a website builder” anymore. The strategic pivot is toward becoming an AI operating system for web and app creation, anchored by the Base44 acquisition (natural-language full-stack “vibe coding”) and the launch of Wix Harmony (AI-assisted onboarding and creation). Base44 is the key chess move here. It captures a large, fast-growing “prosumer” cohort that is beyond drag-and-drop, yet not a traditional developer. In other words, Wix is attempting to sit exactly where the value migrates, i.e. between raw LLM capability and a production-grade, deployable web/app output that SMBs can actually run, monetise, and manage.

Two catalysts reinforce the asymmetry. First, Base44 exited 2025 with approximately $50M ARR run-rate per management and had user growth scaling rapidly, giving Wix a credible third pillar beyond subscriptions and payments. Second, the $2B buyback authorisation announced January 28, 2026 is unusually aggressive relative to Wix’s market cap. By all means, this is not a routine, maintenance repurchase. It reads as management’s own statement that the market is materially mispricing the future cash-generation capacity of the business, at exactly the moment when the narrative has turned most pessimistic.

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Verdict: Deeply Undervalued

Current Price Target (Base Case): $145

Price at the Time of Analysing: $86.84

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A 40% margin of safety places Wix in the undervalued bucket, on the verge of deeply undervalued, where the stock gets at the price of <$85 per share (i.e., currently >20% MoS for undervalued threshold &>40% for deeply undervalued). Put differently, the market price is discounting either a materially higher risk premium than our 10% WACC, structurally weaker long-run margins, and/or a post-2035 decline profile that is inconsistent with our base-case durability assumptions.

Under our base case, Wix’s value proposition is not “a legacy website builder,” but an increasingly integrated subscription and transaction platform with AI-driven retention and ARPU tailwinds (Base44 as a significant upside optionality). Scenario framing reinforces the asymmetry: bear $61/share, base $145/share, bull $211/share. The current price ($86.84) implies a meaningfully more pessimistic steady-state than our normalised base.

The author of this report does hold a position in the security of Wix.com Ltd in private portfolio since Jan 27, 2026 at $86.42 per share as well as a position in our Hated Moats Portfolio from the same date, with avg. price of $86.72. This report is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security.