Wix: More Pain (Ticker: WIX)

Show any signs of being an AI loser, and you will be swiftly punished.

Upcoming schedule: Airbnb (quarterly update), Corporacion America Airports (Full Research Report), and Performance + Short Portfolio Update

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“Look, I don’t love Wix’s management team. But the stock is now at $68, and the company repurchased a third of its outstanding shares in a tender offer earlier this month. We are at a price where management is going to repurchase 99% of shares outstanding over the next five years” – Emerging Moats, April 10th, 2026

“It also means we need to become a faster, leaner, and flatter organization. We are moving to a structure with fewer levels between any member of our leadership and the most junior person on the team. Fewer layers means faster decisions, clearer ownership, and less distance between the people setting direction and the people building the product - but it also means a smaller number of people.” – Founder Avishai Abrahami, May 28, 2026

“While Wix Harmony and Base44 continue to perform as we expected when we issued guidance as part of the first quarter 2026 earnings release, the Company expects an approximately $50 million reduction in bookings and an approximately $25 million reduction in revenue in FY 2026 as a result of our organizational realignment as well as a more pronounced slowdown, beyond our previous expectations, in the growth of our Partners business during the second half of May and early June.” – Wix 6-K, June 8th, 2026

The hits keep coming for Wix. Despite posting solid growth in Q1 and repurchasing a third of its shares at a normalized free cash flow yield of north of 10%, shares have fallen 56% this year and are now down 87% from highs. Management just laid off 20% of workers. Guidance has been reduced due to a slowdown in intake from agency website builders over the last few weeks. Pessimists fear this is the tip of the iceberg.

Shares are priced as if the company may see its entire business model evaporate within a few years, with a market cap of $1.8 billion, a P/S ratio of 0.9 (on a 67% gross margin business), and a P/FCF of 3.5, meaning an investor just needs a few years of existing cash generation to achieve an acceptable rate of return.

I wrote my introductory research report on Wix in February, asking whether it was actually an AI winner trading at 10x cash flow. Good news, we now have the opportunity to buy it at 5x cash flow. Yipee. Right?

Or should we? Last week, I covered my recent trades with Wix. This week, Emerging Moats readers will get in depth analysis of a company at a crossroads.

In this article, I will cover:

• Q1 earnings and guidance revision

• Navigating the AI turbulence

• Is there still an emerging moat?

• My investment decision

Q1 earnings and guidance revision