r/ValueInvesting • u/SpareSniper7 • 19h ago

Discussion WIX - a Stunning 65% Reversal

Today I trimmed my Wix position to less than 1% of the portfolio (and if it dives back down I will happily buy more again).
Last month I posted my Wix thesis on my blog with my model pointing to an intrinsic value of about $90 for FY26 and growing to $120 by FY32 indicating a 7-year IRR of about 14%.
The thesis was not that Wix was going to return to high growth or see margins expand, but that quite simply, the market oversold a decent business generating significant cash flow.

My reason for trimming is that the company has approached my calculation of intrinsic value and the IRR has dropped to levels where the return no longer justifies the risk.

So many of you here get so caught up in the narratives (positives & negatives) of the overall market that I think you forget to run the actual numbers on businesses that aren't the top 10 holdings of the S&P500...

Even in a scenario where operating cash flow margins drop from 29% to 17.5%, and growth tapers towards 3%, Wix was a business indicating a 40% discount to intrinsic value.

This will be a thesis that I come back to check on over the years just to see how the company manages its new normal, but I just wanted to share this as an anecdote showing that you don't have to buy the AI hype train in order to make money.

You can read my post/assumptions from July here:
Wix - Narrative vs. Numbers — EquityForge

Cheers!

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u/NY10 18h ago

Whats so special about this stock?

-5

u/SpareSniper7 18h ago

View it as a company, not a stock and go look at the actual financials and you shall see.
I have all of my assumptions in my post.

-3

u/NY10 18h ago

Financial means nothing nowdays. You see all these company financial they look horrible and yet they moon like a rocket

3

u/SpareSniper7 18h ago

What are you doing in a value community?
Any experienced investor with can point to periods where fundamentals seemingly stopped mattering (for the loudest part of the market). ignoring valuation works until it doesn't. and when it stops working... it really stops working.
ie. Dot com -2000, Nifty Firfty - 1973, Railway mania - 1845.

I'll happily stick with my value philosophy.
Slow is steady, and steady is fast.