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Wix.com (NASDAQ:WIX) shares rose more than 2.5% in pre-market trading on Thursday as Raymond James upgraded the web development company a day after shares fell more than 10% on no company specific news.
Analyst Aaron Kessler raised his rating to outperform market performance and put a per-share price target of $96 on the stock, noting he expects “continued steady bookings and revenue growth” this year as well as strong margin improvement this year and next.
Kessler added that Wix.com (WIX) has become more focused on improving free cash flow and is likely to keep working to cut expenses, while artificial intelligence tools should help the company, by creating faster development and lowering operating expenses.
“We view AI as a positive for the current platforms in the web presence category as it will help customers design websites faster and provide more robust tools,” wrote Kessler in an investor note. “We don’t believe AI is disruptive to current web presence platforms at this time and have a hard time imagining a scenario where they become disintermediated.”
Kessler explained Wix (WIX) is using large language models across its care self-service channels like Chatbot and Help Center, which is expected to increase efficiencies.
Shares of competitor GoDaddy (GDDY) also rose on the back of the upgrade, gaining slightly more than 2%.
Analysts are largely bullish on Wix.com (WIX). it has a HOLD rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha’s quant system, which consistently beats the market, rates WIX a STRONG BUY.