Is Wix.com Ltd. (WIX) Well Positioned for Growth as Business Quality Improves Rapidly? - InvestingChannel

Is Wix.com Ltd. (WIX) Well Positioned for Growth as Business Quality Improves Rapidly?

Lakehouse Capital, a Sydney-based investment manager, released its “Lakehouse Global Growth Fund” November 2024 investor letter. A copy of the letter can be downloaded here. November was a strong month for the fund, fueled by excellent results from several of portfolio companies. The Fund returned 8.0% net of fees and expenses for the month compared to 4.3% for its benchmark. Since its inception in December 2017, the Fund has returned 221.0% compared to 124.7% for its benchmark, the MSCI All Country World Index, Net Total Returns (AUD). In addition, please check the fund’s top five holdings to know its best picks in 2024.

Lakehouse Global Growth Fund highlighted stocks like Wix.com Ltd. (NASDAQ:WIX), in the November 2024 investor letter. Wix.com Ltd. (NASDAQ:WIX) is a global cloud-based web development platform for registered users and creators. The one-month return of Wix.com Ltd. (NASDAQ:WIX) was 3.73%, and its shares gained 84.92% of their value over the last 52 weeks. On January 3, 2025, Wix.com Ltd. (NASDAQ:WIX) stock closed at $222.75 per share with a market capitalization of $12.212 billion.

Lakehouse Global Growth Fund stated the following regarding Wix.com Ltd. (NASDAQ:WIX) in its November 2024 investor letter:

“At the portfolio level, the biggest contributor to performance during the month was Wix.com Ltd. (NASDAQ:WIX) (+34.6%). This is a new position and, so far, things are playing outwell with the company delivering a series of earnings results ahead of expectations – more on Wix below.

Lastly, we’ll wrap things up with a brief introduction to one of the Fund’s newest positions, Wix.com (“Wix”). Wix is a global leader in website development, providing critical infrastructure that enables over 270 million individuals and businesses to create, manage, and grow their online presence. Since its founding in 2006, Wix has always maintained a relentless focus on innovation, with 40% of its workforce in R&D. It has developed a comprehensive suite of tools beyond basic website building, including e-commerce, payments, and marketing solutions. The company exhibits a sticky subscription-based model, with 85% of users on annual or multi-year plans and an impressive 104% net revenue retention rate.

Historically, Wix’s primary focus has been on self-creators (think individuals and SMBs) who are looking to build and manage a website themselves. Whilst this DIY category has been a significant driver of the company’s growth to date, what got us particularly excited about Wix was the success of their new product aimed at professional web developers called Studio. This “do-it-for-me” (DIFM) market has long been dominated by WordPress which holdsroughly 60% market share, however, Wix has recently started making inroads. Wix Studio simplifies the process for partners (agencies and freelancers) to build their clients websites on the Wix platform and the use of revenue sharing arrangements effectively transforms these partners into distributors for Wix…” (Click here to read the full text)

A close-up of a complex web page being developed and refined by a web development specialist.

Wix.com Ltd. (NASDAQ:WIX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 46 hedge fund portfolios held Wix.com Ltd. (NASDAQ:WIX) at the end of the third quarter which was 42 in the previous quarter. Third quarter revenue of Wix.com Ltd. (NASDAQ:WIX) increased 13% year-over-year to $445 million. While we acknowledge the potential of Wix.com Ltd. (NASDAQ:WIX) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed Wix.com Ltd. (NASDAQ:WIX) and shared best Middle East and Africa stocks to buy. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

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