WIX shares slide as Bank of America cuts its rating

Bank of America cut its rating on WIX to underperform from buy and lowered its price target to $68 from $75, according to Yahoo Finance. Michael McGovern, an analyst at Bank of America, cited slowing growth in the company Partners business where agencies build sites for clients, rising competition from artificial intelligence coding tools such as Lovable and Cursor, and higher marketing spending that could limit profit.

He said rapid growth at Base44, the WIX artificial intelligence app building platform, is masking weaker underlying performance. Third-quarter bookings rose 11 percent to $573 million and revenue rose 13 percent to $570.2 million, beating the $566.1 million analysts expected. Adjusted operating income reached $68.7 million, missing the $74 million estimate.

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McGovern noted he could prove too pessimistic if Base44 keeps its subscribers through renewal cycles and becomes profitable faster than expected, and he sees stronger adoption of Headless as a way to steady Partners. WIX said Base44 is nearing $250 million in annual recurring revenue, expects its gross margin to exit the year above 60 percent, and plans to keep spending heavily to win users.