Wix.com (WIX) Stock May Be Cheap After AI Lawsuit Claims

Wix.com trades with a long, painful share price drop in the rear‑view mirror and a surprisingly strong value signal flashing green, which puts fresh focus on whether the current level reflects too much pessimism or not enough caution about the risks now hanging over the story.

• Over the past 5 years, Wix.com shareholders have seen the stock fall 63.8%, which leaves today’s valuation framed by heavy past losses rather than recent momentum.
• The push into AI driven website tools and related products can support long term earnings power, while the ongoing securities class action over alleged misstatements about those same offerings may weigh on sentiment and perceived risk for some time.
• On Simply Wall St’s broader checks, Wix.com screens as cheap, with a value score of 5 that suggests the stock looks undervalued across most of the tested metrics.

The issue now is whether Wix.com’s current price already reflects the legal overhang and recent share price declines, or if the apparent discount still offers room for patient investors to be compensated for those risks.

Compare Wix.com’s sharp 5 year share price decline and current high value score with other potential turnaround opportunities by scanning 31 high quality undervalued stocks now.

Is Wix.com Still Cheap on Sales?

P/S is usually a clean way to compare subscription-heavy platforms like Wix.com because it strips out accounting noise around earnings and focuses squarely on what the market pays for each dollar of revenue.

On this yardstick, Wix.com trades on a P/S of about 1.5x, which is below both the wider IT industry average of roughly 1.8x and a much higher peer group average of about 12.1x. The fair P/S multiple from Simply Wall St’s model sits higher at about 3.8x. This indicates that the current tag is well under what might be expected once the company’s size, margins and risk profile are all taken into account. Even with the overhang from the AI related class action claims filed in Illinois, the market price still values Wix.com’s revenue stream at a noticeable discount to those benchmarks.

On the P/S multiple alone, Wix.com stock appears undervalued compared with both its industry yardsticks and the modelled fair ratio.

See what the numbers say about this price — find out in our valuation breakdown.

The Wix.com Narrative: What Would Justify Today's Price?

Wix.com's valuation puzzle only really comes into focus once you see the Simply Wall St Narratives, which spell out what kind of growth, margins and earnings path would need to play out for the stock to be worth much more or much less than today’s price on the Community page. Rather than a single multiple or model line, each narrative lays out the assumptions behind its fair value so you can compare those expectations with future results as they come through.

Community views on Wix.com pull in opposite directions, with one side leaning into the AI upside and the other focused on cost and competition pressure.

Bull case: 32% undervalued

"Wix's first-mover advantage in AI search visibility and generative engine optimization, combined with proprietary onboarding funnels, positions the company to gain an outsized share as online creation explodes..."

Read the full Bull Case to see why Wix.com could be undervalued

Bear case: 53% overvalued

"Although Wix's growing adoption of advanced AI features (such as generative engine optimization and AI onboarding) is helping boost user conversion and retention rates, the democratization of no-code/low-code tools by new and existing rivals risks commoditizing website creation, which may erode Wix's pricing power and limit future margin expansion..."

Read the full Bear Case to see why Wix.com could be overvalued

Do you think there's more to the story for Wix.com? Head over to our Community to see what others are saying!

The Bottom Line

Wix.com screens as undervalued on market multiples, with the current P/S ratio implying investors are paying relatively little for each dollar of revenue compared with peers and the internal model reference point. That discount only becomes attractive if the business can turn its AI push into durable customer economics without legal or competitive pressure forcing weaker pricing or heavier costs. The crux for both bulls and bears is whether today’s lower revenue multiple reflects temporary anxiety around the AI related lawsuit and competitive noise, or a fair long term mark on Wix.com’s ability to sustain attractive margins in a crowded website tools market.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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