It would be interesting to hear Bear’s thoughts.
I’m not sure if WIX has typically low balled guidance in the past.
Wix’s 2018 revenue guidance at the high end, as of:
Dec17: $595m
Mar18: $597m
Jun18: $599m
Sep18: $602m
And of course they’ve achieved $604m. So I wouldn’t suggest anyone expect that the $761m they’ve guided for is a significant sandbag. Note that FCF guide is up 38%, but I think when they deliver that or better, the market will yawn, because an expectation of profitability improvements are baked into the current PE of ~105.
I’ve long said that if Wix’s growth trends down toward 30% in the next couple years, I’d still be happy. But I agree with others here that high-20’s growth already for 2019 (which probably means Q3 and Q4 will be mid or even low 20’s) is fairly disappointing. I still see very little downside here. In fact, I would expect that Wix continues to outpace the market, but I can’t see shares appreciating wildly. I’m thinking maybe we see $150/share in the next couple years, but probably nowhere near $220 (a double).
I like to only invest in things I could see doubling or tripling, so I’ve trimmed my Wix position quite a bit this morning. (Lucky for me, I trimmed yesterday too, since Wix was up 40% YTD!) Will I sell it all? Depends if I can find something else that I’d like to buy or add to. Honestly, right now it’s hard to see anything doubling or tripling in short order, so I’m having a little trouble finding things I want to buy.
Bear