Bank of America has reduced its recommendation on Wix.com to Underperform from Buy, pointing to deceleration in the Partners business, heightened rivalry from new AI development tools, and the potential for greater marketing spend to constrain margins. The firm also cut its price target to $68 from $75, a 9% reduction.
The brokerage highlighted competition from AI-focused development platforms such as Lovable and Cursor as a specific threat to Wix's core website-building franchise, especially among agency partners that make up a substantial portion of the company's Partners revenue stream.
Wix reported third-quarter revenue of $570.2 million, a 13% increase year over year, which exceeded analyst expectations of $566.1 million. Bookings for the quarter were $573 million, up 11% and also ahead of consensus. Within the company, however, revenue from the Partners segment rose 11% to $212.4 million, missing the $214.1 million estimate and slowing by six percentage points versus the prior quarter.
Bank of America analyst Michael McGovern said that rapid expansion at Base44 - Wix's AI-powered offering - has been obscuring weaker performance in the firm's underlying business. Base44's annual recurring revenue has approached $250 million, while the brokerage estimated that growth in core Wix ARR could be as low as 3% to 4%.
The broker also drew attention to higher sales and marketing outlays. Those expenses reached $193 million for the quarter, about 5% above consensus estimates. Adjusted operating income came in at $68.7 million, under the $74 million analysts had forecast.
Looking ahead, Wix expects fourth-quarter revenue growth in the low double digits. Bank of America lowered its own growth projection for the company to 12% from 14% and trimmed its adjusted EBITDA margin forecast to 15% from 18% for the same period.
For 2027, the brokerage cut its revenue estimate for Wix to $2.52 billion from $2.56 billion and reduced its EBITDA forecast to $370 million from $438 million, citing continued pressure from slowing core growth and sustained competitive dynamics in AI development tools.
Context and implications
Bank of America’s downgrade centers on two dynamics: the dilution of growth momentum in Wix’s traditional Partners channel and mounting competition from purpose-built AI coding platforms that could attract agency partners and developers away from Wix’s website-building ecosystem. While Base44 has delivered material ARR gains, the brokerage’s estimates suggest the underlying platform may not be delivering equivalent growth across the broader customer base.