What is WIX's Intrinsic value?

Wix.Com Ltd (WIX) Intrinsic Value Analysis

Executive Summary

As of October 28, 2025, Wix.Com Ltd's estimated intrinsic value ranges from $78.88 to $143.32 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $143.32 +2.8%
Discounted Cash Flow (5Y) $100.64 -27.8%
Dividend Discount Model (Multi-Stage) $102.47 -26.5%
Dividend Discount Model (Stable) $78.88 -43.4%

Is Wix.Com Ltd (WIX) undervalued or overvalued?

With the current market price at $139.35, the stock appears to be moderately overvalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Wix.Com Ltd's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
  2. Dividend Discount Model (DDM): Values the company based on expected future dividend payments

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.73 0.76
Cost of equity 7.2% 9.1%
Cost of debt 5.0% 5.0%
Tax rate 9.6% 10.9%
Debt/Equity ratio 0.07 0.07
After-tax WACC 7.0% 8.8%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

  • Forecast Period: 5-year DCF and 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 7.9% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $1,761 (FY12-2024) to $4,167 (FY12-2034)
  • Net profit margin expansion from 8% to 15%
  • Capital expenditures maintained at approximately 3% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $101 $5,407M 85.7%
10-Year Growth $143 $7,750M 74.7%
5-Year EBITDA $70 $3,737M 79.3%
10-Year EBITDA $102 $5,485M 64.3%

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 0.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 8.2%
  • Long-term growth rate: 4.0%
  • Fair value: $102.47 (-26.5% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 9.1% (Low) to 7.2% (High)
  • Long-term growth rate: 3.0% (Low) to 5.0% (High)
  • Fair value range: $35 to $123
  • Selected fair value: $78.88 (-43.4% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $7650M
Enterprise Value $7532M
Trailing P/E 46.01
Forward P/E 41.83
Trailing EV/EBITDA 11.45
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.07

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Discounted Cash Flow (10Y) 33% $43.00
Discounted Cash Flow (5Y) 28% $25.16
Dividend Discount Model (Multi-Stage) 22% $20.49
Dividend Discount Model (Stable) 17% $11.83
Weighted Average 100% $111.65

Investment Conclusion

Based on our comprehensive valuation analysis, Wix.Com Ltd's intrinsic value is $111.65, which is approximately 19.9% below the current market price of $139.35.

Key investment considerations:

  • Strong projected earnings growth (8% to 15% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.07)

Given these factors, we believe Wix.Com Ltd is currently moderately overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.