Wix Announces $2 Billion Buyback, Analysts See Upside Despite Sector Headwinds
In a bold move signaling confidence in its intrinsic value, website builder giant Wix.com Ltd. (NASDAQ: WIX) unveiled a substantial $2 billion share repurchase program on January 28. The announcement comes as the company's stock, like many in the cloud software sector, has weathered a significant downturn over the past year.
"Management is capitalizing on market pessimism," noted David Chen, a portfolio manager at Horizon Capital. "A buyback of this scale at depressed levels is a strong signal they believe the market is fundamentally mispricing their long-term cash flow potential."
The repurchase plan arrives amidst a nuanced analyst landscape. On January 15, Morgan Stanley's Elizabeth Porter reiterated an Overweight rating on WIX but lowered her price target from $181 to $160. Even this adjusted target suggests a near 100% upside from recent trading levels, aligning with the median estimate from two dozen analysts covering the stock. Similarly, Citi maintained its Buy rating with a $150 target on January 14.
In a recent sector note, Morgan Stanley highlighted that Application Software-as-a-Service (SaaS) firms underperformed both the broader technology and software indices in 2025. However, the firm offered a cautiously optimistic view for 2026, suggesting that the perceived disruptive threat from generative AI to established SaaS platforms may be less severe than initially feared. A key lingering concern, the analyst cautioned, is the continued lack of broad-based upward revisions to corporate IT spending forecasts.
"This is classic financial engineering to prop up a faltering stock," countered Sarah Jenkins, an independent market commentator known for her sharp critiques. "Throwing $2 billion at buybacks instead of aggressively investing in AI innovation or customer acquisition feels defensive. It tells me they're out of growth ideas and are managing for optics."
For long-term investors like retiree Michael Torres, the strategy resonates. "I've used Wix for my small business for years. The stock drop seemed overdone. If management is willing to put this much capital behind their own company, it gives me confidence to hold and average down."
The steep decline has made Wix notably cheaper on a forward earnings basis, with analysts coalescing around the view that the risk-reward profile is now compelling. The company, founded in 2006 and headquartered in Tel Aviv, provides a comprehensive cloud-based development platform including Wix Studio, Editor, and its App Market.
The buyback initiative underscores a broader debate in the tech sector: whether capital return programs represent prudent stewardship in a volatile market or a lack of transformative growth opportunities in the AI era.