BofA cuts Wix price target to $95 following Q1 earnings miss
Analysts at BofA Securities have revised their outlook for Wix.com, citing elevated expenses from its Base44 acquisition and mixed first-quarter results.
BofA Securities has lowered its price target for Wix.com from $109 to $95 on May 13, while maintaining a Buy rating. The adjustment follows the release of the company’s first-quarter FY2026 earnings, which the investment bank characterised as mixed. The revision reflects a recalibration of expectations regarding the web development platform’s ability to manage the costs associated with its recent artificial intelligence expansions.
Wix.com reported quarterly revenue of $541 million, representing a 14% year-on-year increase. However, this figure fell short of the analyst consensus of approximately $544 million. The shortfall was more pronounced in profitability metrics, with non-GAAP earnings per share coming in at $0.68, significantly below the $1.22 expectation. The divergence between top-line growth and bottom-line performance has prompted the downward adjustment in valuation.
Management attributed the earnings miss to elevated AI compute costs linked to scaling Base44, an AI-powered app-building platform acquired in 2025. The firm noted that Base44 has not yet fully ramped to the scale that the market had priced into the stock. Additionally, the company highlighted a 46% year-on-year surge in new user cohort bookings, reaching $52 million, which was largely driven by the integration of the Base44 technology.
The earnings decline was further influenced by higher user conversion rates, a positive operational metric driven by the January 2026 rollout of Wix Harmony, the company’s AI website creation platform. Management explained that new users consume disproportionately more AI inference bandwidth during their initial build phase. Consequently, the costs associated with Base44 are front-loaded by design, impacting short-term profitability despite the long-term strategic intent.
Wix.com Ltd. operates as a cloud-based web development platform, providing tools for individuals and businesses to create and manage digital applications without advanced coding expertise. While the firm maintains its Buy rating, the BofA Securities analysis underscores the near-term financial friction caused by heavy investment in AI infrastructure. The market will now watch to see if the anticipated scale of Base44 eventually offsets these initial compute expenditures.
