Yesterday Wix launched Ascend, a suite of 20 products that lets entrepreneurs start, manage and promote a business directly from the Wix web development platform.
https://www.wix.com/stories/press-releases/introducing-ascen…
Ascend will be billed as an additional subscription for Wix customers with tiered pricing to fit the growth of small businesses.
They highlighted results customers have had, driven by their products, and to me it seems that the ROI is a no-brainer for management.
Bear
Bear - does this seem SHOP-like in terms of new offerings for clients, or who do you see these new offerings competing against in the marketplace?
thanks!
Dreamer
Bear - does this seem SHOP-like in terms of new offerings for clients, or who do you see these new offerings competing against in the marketplace?
thanks!
Dreamer
Good question. I’m sure this suite of offerings might attract some to Wix from other platforms (like Shopify), or get some new ecommerce participants to choose Wix over the competition. But the way I mainly see this playing out is that it’s a way for the 3.8 million Wix subscribers to up their game. The ones who are doing well should be able to easily see this as a value-add, and spend another $9 to $45 each month with Wix. The fact that Wix is constantly building out more stuff like this also keeps their customers from looking around for something better as the customers grow and have more needs and more ability to spend.
Wix should really be able to juice ARPU if they keep coming up with high-ROI value adds for their current customers, and any future customers who eventually want more services from Wix, and it sure seems like Ascend is a big one.
That’s how I see it, anyway.
Bear
Bear,
Thanks for reply, and that makes sense.
Do you have any thoughts on why WIX hasn’t been as appreciated the past 6 months as some others that have had similarly solid growth?
Today, for example, I notice WIX not participating in what seems like a broad uptick for most stocks on my watchlist.
I am trying to find a “bargain” that isn’t a bargain for the wrong reasons, like NVDA was recently or TLND recently. Trying to find the devil’s advocate reason why WIX hasn’t been as valued by the market.
From a P/S standpoint, WIX is about 8 and that is where NVDA and NTNX are, and also with “cloud king” CRM.
I am not in the weeds on WIX or PAYC lately, but I get the general sense they should be valued somewhat the same in that both are growth (but not hyper-growth) and showing ability to turn a profit. Yet PAYC is about a 14 P/S as an example.
I know P/S is just one way to evaluate a stock, but trying to find a hidden gem and have to compare stocks somehow.
Is there a generally associated TAM number for WIX…perhaps the market doesn’t feel there is enough market upside to be had? A lot of questions about economy and when economy struggles, small businesses are one of the first to get impacted, I imagine.
Dreamer
Is there a generally associated TAM number for WIX…perhaps the market doesn’t feel there is enough market upside to be had? A lot of questions about economy and when economy struggles, small businesses are one of the first to get impacted, I imagine.
Hi Dreamer,
I think that that is perhaps part of the explanation, but I also think that companies like Okta, Twilio, Alteryx and Zscaler, that one can imagine appealing to all the enterprises in the world, will inevitably have a larger EV/S ratio than a niche player whose primary business is marketing free websites to all comers and then trying to upset them. Just a different world. But that’s just my opinion.
Best,
Saul
…a niche player whose primary business is marketing free websites to all comers and then trying to upset them.
That’s not a good business model! I assume they’re trying to upsell them, not upset them. 
Certainly looks like the market is saying “stay away.” I believe Cramer has the CEO on this evening. I will be interested to here what he has to say.
Do you have any thoughts on why WIX hasn’t been as appreciated the past 6 months as some others that have had similarly solid growth?
First, beware asking for thoughts from a man far too ready to give them. 
Actually, it’s much worse than you’ve described. It’s not simply failure to appreciate recently – Wix is down! Wix hit $120/share in September, and it’s under $90 as I type. Meanwhile TWLO, MDB, and AYX have not only recovered September highs, but are setting new ones. What gives?
Well, PAYC and NEWR are in the same boat as WIX regarding share price – all are still roughly 20% or more off their highs. I think it’s safe to say there’s been some stratification between companies growing at ~60% or more, and companies growing at 30% or 40%, regardless how profitable they are.
I think the stratification is overblown. I would absolutely take Mongo over Wix if their PS ratios were the same, or close. But Wix under 8 and MDB at 22?
I’m totally a fan of searching for quality. I would never sell all my “expensive” ones. But there’s not only room for both – to me it’s required. I’m certainly not skipping out on stocks I believe in just because they’re bargains!
I don’t know if or when the market will close the gap on the stratification. But I’m happy to accumulate at a discount, as long as the stories are intact, as I believe they are with Wix, New Relic, and Paycom.
Bear