Wix.com (WIX) is facing long-term concerns surrounding web design and a core ongoing deceleration despite the "impressive" growth of its Base44 app and software builder product, RBC Capital Markets said in a note emailed Wednesday, following the company's Q3 results.
RBC said further Base44 inflection may be needed to keep "adequate" bookings growth into 2027 and 2028.
Wix.com reported fiscal Q3 non-GAAP net income Tuesday of $1.42 per diluted share, down from $1.68 a year earlier. Analysts polled by FactSet expected $1.40. Revenue was $570.2 million, up from $505.2 million a year earlier. Analysts expected $566.3 million.
RBC noted Base44's growth has been strong with the product closing in on $250 million of annual recurring revenue, up from $150 million in mid-May.
However, the investment firm said that excluding Base44, it estimates that core Wix bookings may have decelerated further to low single digit growth in Q3, and creative subscriptions are potentially down low single digits.
RBC lowered the company's price target to $58 from $60 and kept the company's sector perform rating.
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