Bank of America Downgrades Wix to Underperform, Cuts Price Target to $68
Key Facts
Bank of America downgraded Wix from “Buy” to “Underperform” and cut its price target to $68 from $75, according to an Investing.com report published on November 10, 2026. The bank attributed the move to slower growth in the partner business, intensifying competition from AI-powered coding tools and concerns that higher marketing spending could limit profitability. The move came as concerns centered on growth in Wix’s core website-building business, despite expansion in its AI-powered Base44 business. The report said the bank believes Base44’s rapid growth could mask weaker performance in the core business. The bank estimated annual recurring revenue growth for that business at about 3% to 4%.
Pressure is evident in the partner segment, which recorded revenue of $212.4 million in the third quarter of 2026, up 11% year over year, according to Investing.com. But revenue fell short of analysts’ expectations of $214.1 million. Segment growth also slowed by six percentage points from the previous quarter, adding to the bank’s concern about the business’s trajectory. The report said competition from Lovable and Cursor could pressure Wix’s core website-building business. That competition is increasingly significant for agency partners, who make up part of the company’s business base in this area.
In the bank’s assessment, the issue extends beyond revenue growth: sales and marketing expenses reached $193 million in the third quarter, about 5% above analysts’ expectations. Adjusted operating income was $68.7 million, compared with an estimate of $74 million. Wix, meanwhile, said Base44’s annual recurring revenue approached $250 million when it reported third-quarter results, attributing this to customer-acquisition momentum and improved user retention. The company’s non-GAAP gross margin was 69% in the same quarter, unchanged year over year and up two percentage points from the previous quarter. Base44 posted a gross margin of 58% in the third quarter, compared with a level near zero in the first quarter.
Bank of America cut its estimate for Wix revenue growth in the fourth quarter of 2026 to 12% from 14%, and lowered its estimate for EBITDA margin to 15% from 18%. For fiscal 2027, it cut its revenue estimate to $2.52 billion from $2.56 billion and its EBITDA estimate to $370 million from $438 million. In its disclosure, Wix forecast low double-digit revenue growth in the fourth quarter and said bookings growth would continue to lag revenue growth because the partner slowdown affects bookings more quickly. The company maintained its 2026 revenue guidance for low- to mid-teens growth, while expecting Base44 to continue supporting performance through the rest of the year. It also expected Base44’s non-GAAP gross margin to exceed 60% in the fourth quarter.
Wix’s total revenue was $570.165 million in the third quarter of 2026, compared with $505.194 million in the same period of 2025, according to the company’s filing with the U.S. Securities and Exchange Commission. Alongside the downgrade, Wix shares fell 5.5% in premarket trading on November 10, according to Investing.com coverage. The company also announced the appointment of Nir Zohar, its co-founder and president, as co-CEO alongside Avishai Abrahami, effective immediately. Wix also announced the launch of Studio Two, an AI-powered open creation platform aimed at professional designers and agencies. These developments put Base44’s growth and AI products against a slowdown in the partner segment, while the company said it expected Base44’s margin to improve in the fourth quarter.