Wix.Com (NASDAQ:WIX) vs. Facebook (NASDAQ:FB) Critical Review

Wix.Com (NASDAQ:WIX) and Facebook (NASDAQ:FB) are both large-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, risk, earnings, dividends, valuation, profitability and analyst recommendations.

Insider & Institutional Ownership

91.4% of Wix.Com shares are held by institutional investors. Comparatively, 65.1% of Facebook shares are held by institutional investors. 14.1% of Facebook shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Wix.Com and Facebook’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Wix.Com $761.09 million 16.79 -$86.41 million ($0.99) -258.81
Facebook $70.70 billion 9.15 $18.49 billion $6.43 35.31

Facebook has higher revenue and earnings than Wix.Com. Wix.Com is trading at a lower price-to-earnings ratio than Facebook, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Wix.Com and Facebook’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Wix.Com -11.81% -29.30% -5.39%
Facebook 28.57% 21.54% 16.34%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Wix.Com and Facebook, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wix.Com 0 2 14 0 2.88
Facebook 1 3 40 0 2.89

Wix.Com presently has a consensus target price of $217.81, suggesting a potential downside of 14.99%. Facebook has a consensus target price of $247.17, suggesting a potential upside of 8.85%. Given Facebook’s stronger consensus rating and higher possible upside, analysts clearly believe Facebook is more favorable than Wix.Com.

Volatility and Risk

Wix.Com has a beta of 1.87, indicating that its share price is 87% more volatile than the S&P 500. Comparatively, Facebook has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500.

Summary

Facebook beats Wix.Com on 11 of the 14 factors compared between the two stocks.

About Wix.Com

Wix.com Ltd. develops and markets an Internet service that allows users to create Web content in Latin America, Europe, North America, Asia, and internationally. It offers Web development, design, and management solutions and apps through an online platform that enables its user base of businesses, organizations, professionals, and individuals to create a digital presence. The company's principal product is the Wix Editor, a drag-and-drop visual development and Website editing environment platform. Its applications and value-added solutions comprise Wix App Market, an online platform that offers its users a range of software apps, which could be integrated as add-ons into its users' Websites. In addition, the company provides Wix ShoutOut, which enables users to create and send customized email campaigns, such as newsletters, updates, and promotions directly from their Wix accounts. Further, it offers Wix Stores that allows its users to create, design, and manage an online store through which they may sell their products online and process payments using an integrated shopping cart app; Wix Bookings, an online appointment booking solution; Wix Hotels, a Website for hotels, B&Bs, and vacation rentals; Wix Music, an advanced music player solution; and Wix Restaurants that provides various solutions for restauranteurs, including Wix Restaurants menus, orders, and reservations. Additionally, the company provides Wix Photography, a solution for photographers looking to create their portfolio and manage their business online; Wix Video that allows its customers to showcase, promote, and sell videos on their Wix Website; and customer support and services. As of December 31, 2017, it had approximately 119.3 million registered users and 2,465,160 premium subscriptions. The company was formerly known as Wixpress Ltd. Wix.com Ltd. was founded in 2006 and is headquartered in Tel Aviv, Israel.

About Facebook

Facebook, Inc. provides various products to connect and share through mobile devices, personal computers, and other surfaces worldwide. The company's products include Facebook that enables people to connect, share, discover, and communicate with each other on mobile devices and personal computers; Instagram, a community for sharing photos, videos, and messages; Messenger, a messaging application for people to connect with friends, family, groups, and businesses across platforms and devices; and WhatsApp, a messaging application for use by people and businesses to communicate in a private way. It also provides Oculus, a hardware, software, and developer ecosystem, which allows people to come together and connect with each other through its Oculus virtual reality products. As of December 31, 2018, it had approximately 1.52 billion daily active users. The company was founded in 2004 and is headquartered in Menlo Park, California.

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