Cantor sees Wix as acquisition target

Two weeks ago Israeli tech company Wix.com Ltd. (Nasdaq: WIX) published its financial results for the first quarter of 2025, which disappointed investors and saw the company’s share price fall 16% in one day. The stock has fallen further since. Overall the share price has fallen 30% since the start of the year, wiping $5 billion off its peak market cap in January, over a period when the Nasdaq index has remained unchanged.

Wix, led by CEO and cofounder Avishai Abrahami, allows users the build and manage websites. Most of the analysts covering Wix are positive on the stock, with the average recommendation being “outperform,” and the average price target reflecting a 49% premium on the market price. A possible upside for the stock may come from a surprising direction, with veteran US investment bank Kantor speculating that Wix may be an acquisition target.

Cantor’s Internet analyst Deepak Mathivanan writes, Over the last few weeks, M&As in tech have accelerated across the board in Internet, Software, etc. The environment remains less conducive for mega-caps to acquire companies; however, we believe that small and mid-caps with an attractive product-market fit, compelling financial profiles, and trading at reasonable valuations are increasingly likely to attract bids from both strategic and financial sponsors.

Cantor mentions companies likely to be acquisition targets because of their – attractive products, compelling financials and reasonable pricing – tourism website Tripadvisor, tourism tech companies Sabre, online marketplace Etsy, food delivery website Instacart, and Wix.

Cantor does not mention who the specific buyers might be but clearly as Wix has a market cap of $8.3 billion and would expect a handsome premium, any buyer would need deep pockets.

Wix left guidance unchanged despite mixed results

Wix has already traded at higher market caps in the past: Like many tech companies, its stock peaked in 2021 – a record year for tech stocks. Wix was then benefiting from the “side effects” of the Covid pandemic – the need for social isolation led to an accelerated transition to digital, and thus small and medium-sized businesses, which are a key target audience for the company, expanded or built websites for the first time, to manage their business activities.

At the start of 2021, Wix became the largest Israeli company on Wall Street, with a market cap of about $20 billion. However, the post-Covid return to normal and the change in investor preferences cut the share price by 85% in a few months – a low from which it has since recovered.

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Since the publication of the most recent financial results, the share price has weakened. Wix posted first quarter revenue of $474 million, up 13% from the corresponding quarter, GAAP net profit of $33.8 million and non-GAAP net profit of $93.9 million, surpassing market forecasts in revenue, but not meeting them on profit. Guidance for the second quarter was lower than analysts’ forecasts, but the company left its annual guidance unchanged, and still expects revenue of $1.97-2 billion.

Published by Globes, Israel business news – en.globes.co.il – on June 3, 2025.

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