Shares in Wix.com dropped more than 12% in early trading on Wednesday, making it one of the worst performers in the tech sector. The Israeli cloud-based web development platform saw its stock fall to around $145, down from $165 at Tuesday's close, as investors digested the company's latest financial outlook.
The sell-off was triggered by Wix's forward guidance, which indicated that revenue growth would slow in the coming quarters. While the company reported better-than-expected earnings for the previous quarter, its cautious tone on future demand—particularly among small and medium-sized businesses—spooked the market. Analysts at several investment banks cut their price targets on the stock following the announcement.
Wix is not alone in facing headwinds. The broader tech sector has been under pressure this week as rising bond yields and expectations of tighter monetary policy from central banks have dampened appetite for high-growth equities. The Nasdaq Composite fell 1.8% on Wednesday, with cloud and software stocks bearing the brunt of the sell-off.
For UK investors holding Wix shares through global equity funds or pension portfolios, the drop represents a notable setback. The company is a popular holding in many tech-focused exchange-traded funds (ETFs) and growth-oriented pension mandates. Analysts at Hargreaves Lansdown noted that while Wix's core product remains strong, the market is increasingly focused on profitability over user growth, a shift that could weigh on the stock in the near term.
Some market commentators argue that the sell-off may be overdone. 'Wix has a solid balance sheet and a loyal customer base,' said a tech analyst at AJ Bell. 'But in the current environment, any sign of deceleration is punished harshly.' The company is expected to report its next set of quarterly results in late October.
Source: Yahoo Finance, Reuters