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BlackBerry Limited BB has enhanced its trusted QNX OS for Safety by introducing a unique POSIX-compliant filesystem that includes integrity checking. This addition offers original equipment manufacturers (OEM) and other embedded software providers an extra layer of validation for developing safety-critical systems. This solution is now available as part of the QNX OS for Safety 2.2.3 release.
Certified to ISO 26262 ASIL B, the functional safety standard for the automotive industry, the QNX Filesystem for Safety (QFS), ensures the integrity of all filesystem contents at runtime. This capability allows embedded software developers to detect any corruption and take essential actions to maintain system integrity.
BlackBerry highlighted that if a file, which is critical to run functions like collision avoidance or object detection, becomes corrupted before running or is loaded with incorrect configuration data, if goes unnoticed until it’s needed, can result in dangerous situations. QNX Filesystem for Safety mitigates this risk by validating all data and performance parameters essential for safety-critical systems.
The company also emphasized the launch of QNX Filesystem for Safety as part of its commitment to enhance functional safety-certified software, simplifying the development of safety-critical systems for customers. Selected OEMs and Tier 1 suppliers are currently employing QNX Filesystem for Safety 1.0 in the development of next-generation automotive technologies.
BlackBerry Focuses on Enhancement of QNX Platform
BlackBerry QNX is a real-time operating system and software for embedded systems, including vehicles, ventilators, train controls, factory automation systems, medical robots and more. The company continues to innovate this platform through the addition of new capabilities.
In July 2024, BlackBerry Limited division, QNX, strengthened its software portfolio by unveiling cutting-edge QNX Containers. The move represents a significant advancement in container technology for QNX-based devices. The containers facilitate the functioning and management of container technology on QNX-based devices. They offer a standards-based environment that harnesses the power of containerization while upholding the safety, security and reliability of the QNX microkernel model.
Additionally, in January 2024, the company launched QNX Everywhere, which is aimed at meeting the growing demand for skilled embedded systems developers globally.
BlackBerry Limited Price and Consensus
BlackBerry Limited price-consensus-chart | BlackBerry Limited Quote
In the last reported quarter, BlackBerry secured several significant design wins for the QNX platform. One of the top five global automakers selected the QNX hypervisor, acoustics module and ADAS sensor framework, for a worldwide deployment. A leading electric vehicle OEM also selected QNX for integration with its new SUVs and pickups.
This momentum in QNX’s growth is expected to be propelled by greater penetration of the total number of global light vehicle production units in calendar year 2024 compared to 2023, as well as higher content per vehicle as these vehicles increasingly become smarter and more software-defined.
These enhancements to the BlackBerry QNX platform will aid the company in tapping into the rising demand for this platform. This is expected to boost the top line and drive the stock upward.
BB’s Zacks Rank & Stock Price Performance
BB currently carries a Zacks Rank #3 (Hold). Shares of the company have lost 53.6% in the past year against the sub-industry's growth of 29.2%.
Stocks to Consider
Some better-ranked stocks from the broader technology space are Manhattan Associates, Inc. MANH, ANSYS, Inc. ANSS and American Software, Inc. AMSWA. MANH presently sports a Zacks Rank #1 (Strong Buy), whereas ANSS & AMSWA carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Manhattan Associates delivered an earnings surprise of 26.6%, on average, in the trailing four quarters. In the last reported quarter, MANH pulled off an earnings surprise of 22.9%. The Zacks Consensus Estimate for MANH has increased 9.2% to $4.26 in the past 60 days.
ANSYS delivered an earnings surprise of 4.8%, on average, in three of the trailing four quarters. In the last reported quarter, ANSS pulled off an earnings surprise of 28.9%. It has a long-term earnings growth expectation of 6.4%.
American Software delivered an earnings surprise of 84.5%, on average, in the trailing four quarters. In the last reported quarter, AMSWA pulled off an earnings surprise of 71.4%. The Zacks Consensus Estimate for AMSWA has increased 8.6% to 38 cents in the past 60 days.
Zacks Investment Research
Blackbaud, Inc. BLKB recently collaborated with its long-standing partner Microsoft to incorporate Microsoft AI and analytics into software, designed for the distinct operational needs of social impact organizations, eliminating the necessity for expensive customizations. The new product innovations will provide more value to nonprofits and education markets by helping them create a bigger impact, gain better insights and work more efficiently.
Supported by Microsoft technologies, Blackbaud's leading donor management solutions, Blackbaud CRM and Blackbaud Raiser's Edge NXT, will utilize the most comprehensive fundraising data model available. These robust tools enhance data clarity and consistency, allowing social impact organizations to navigate complex fundraising operations and boost donor engagement, gift amounts and overall funds raised. By incorporating Microsoft Fabric to consolidate data sources, Blackbaud can offer new features such as tailored productivity dashboards. These customized role-specific dashboards empower users to prioritize their next steps and critical tasks effectively.
Blackbaud's leading financial management tool, Blackbaud Financial Edge NXT, is set to incorporate the Microsoft Azure AI Document Intelligence service for automating the scanning of invoices and receipts. This partnership will streamline the entire payables process within Financial Edge NXT. Additionally, Blackbaud leverages Microsoft AI Services to implement its Intelligence for Good strategy, promoting effective and responsible AI for social impact, including the upcoming Blackbaud Impact Edge, a new data and storytelling solution.
Microsoft will serve as the presenting sponsor of bbcon 2024, Blackbaud's annual technology conference set for Sept. 24-26 in Seattle, where it will conduct sessions focused on how nonprofits can utilize AI and data to improve fundraising and campaign planning.
Blackbaud Aims to Enhance Product Offerings with AI Innovations
In July, Blackbaud enhanced its grants management platform, Blackbaud Grantmaking, by introducing AI-powered features to simplify the grantmaking process. The dynamic form builder allows users to create visually appealing application forms and can translate them into over 25 languages, including French, Spanish and Welsh.
In April, the company improved its flagship fundraising and donor management software, Raiser's Edge NXT, with an array of upgraded functionalities. The latest AI solutions automate customer journeys and “surface new donation opportunities” to increase valuable supporters. Based on BLKB’s Intelligence for Good strategy, the generative AI aids fundraisers in drafting constituent communications.
Blackbaud, Inc. Price and Consensus
Blackbaud, Inc. price-consensus-chart | Blackbaud, Inc. Quote
Blackbaud is a leading software provider focused on supporting social impact. Its software is designed to enhance impact in areas such as fundraising, financial management for nonprofits, digital giving, grantmaking, corporate social responsibility and education management.
Blackbaud is benefiting from healthy demand for its differentiated software solutions. The social sector (88% of total revenues in the second quarter) is identified as the major revenue-generating unit for the company, with 8.5% year-over-year growth in revenues for the recent quarter. These AI innovations can help Blackbaud generate revenues by optimizing fundraising strategies and thereby propel its financial performance in the future.
BLKB’s Zacks Rank & Stock Price Performance
BLKB currently carries a Zacks Rank #3 (Hold). Shares of the company have gained 15% in the past year compared with the sub-industry's growth of 29.2%.
Stocks to Consider
Some better-ranked stocks from the broader technology space are Manhattan Associates, Inc. MANH, ANSYS, Inc. ANSS and American Software, Inc. AMSWA. MANH presently sports a Zacks Rank #1 (Strong Buy), whereas ANSS & AMSWA carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Manhattan Associates delivered an earnings surprise of 26.6%, on average, in the trailing four quarters. In the last reported quarter, MANH pulled off an earnings surprise of 22.9%. The Zacks Consensus Estimate for MANH has increased 9.2% to $4.26 in the past 60 days.
ANSYS delivered an earnings surprise of 4.8%, on average, in three of the trailing four quarters. In the last reported quarter, ANSS pulled off an earnings surprise of 28.9%. It has a long-term earnings growth expectation of 6.4%.
American Software delivered an earnings surprise of 84.5%, on average, in the trailing four quarters. In the last reported quarter, AMSWA pulled off an earnings surprise of 71.4%. The Zacks Consensus Estimate for AMSWA has increased 8.6% to 38 cents in the past 60 days.
Zacks Investment Research
Cadence Design Systems CDNS stock has declined 15.8% in the past three months, underperforming its industry and the broader technology sector. Within the same time frame, the sub-industry and the Zacks Computer and Technology sector have declined 2.5% and 4.3%, respectively. It also lags the S&P 500’s growth of 2.4%.
Three-Month Price Performance
CDNS shares have been declining as the company’s guidance for the current quarter revenues and earnings per share came in lower than anticipated despite positive business trends. The guidance is largely affected by the timing of Verification revenues and headwinds associated with China revenues.
This considerable decline in stock price has caught the attention of investors, prompting questions about whether to maintain their positions or cut their losses.
What Ails CDNS Stock?
The transition to next-generation Verification systems will weigh on the near-term revenues from the Functional Verification segment. CDNS launched new Verification hardware systems in April 2024. As a result, upfront revenues are expected to be skewed toward the second half of 2024 as the company works to build inventory of new systems.
Management noted that the ‘shape of the revenue curve’ is driving the guidance. It does not expect massive revenue growth in the Verification business in 2024 but it will be an improved performance over 2023. Verification revenues are likely to pick up pace in 2025 once the company completes building inventory of its new systems.
Moreover, CDNS cut the full-year EPS outlook, owing to the dilutive impact of 12 cents of the BETA CAE acquisition. Non-GAAP earnings per share for the full year are expected to be between $5.77 and $5.97 compared with the previous guidance of $5.88 and $5.98.
Uncertainty prevailing over global macroeconomic conditions and substantial exposure to the semiconductor vertical is concerning. Any reduction in R&D spending for companies within the semiconductor sector could affect CDNS' performance.
Higher operating costs and stiff competition in the EDA space from the likes of Keysight Technologies KEYS, Synopsys SNPS and ANSYS ANSS are additional headwinds. The pending acquisition of ANSYS by Synopsys is likely to amp up competition in the EDA space for all players.
CDNS' Premium Valuation & Bearish Technical Indicators
Cadence’s stock is trading at a premium with a forward 12-month Price/Earnings of 41.59X compared with the industry’s 32.56X. Though the lofty valuation reflects high expectations for future growth, the near-term prospects of the company remain somewhat muddled.
CDNS’ technical indicators suggest that further downside could be ahead. The stock has been trading below both the 100-day and 200-day moving averages, indicating that investors may be losing confidence in the stock. High valuation and bearish technical indicators suggest that CDNS stock may face more volatility, at least in the near term.
Estimates are Southbound for CDNS
Analysts are bearish about the stock, which is evident from the downward revision in earnings estimates.
In the past 60 days, analysts have decreased their earnings estimates for the current quarter and current year by 11.1% and 1% to $1.44 and $5.87 per share, respectively. The estimate for the next year has also been revised downward by 1.2% to $6.90.
Cadence’s Long-Term Prospects Encouraging
Strengthening demand trends for differentiated solutions, solid bookings and healthy backlog are key growth catalysts for CDNS. Cadence noted that its latest hardware (Palladium Z3 Emulation and Protium X3 FPGA Prototyping systems) solutions are likely to witness solid demand, especially by AI, hyperscale and automotive companies.
The Z3 and X3 platforms offer more than double the capacity and a significant performance increase from the prior generation. Leading tech firms like NVIDIA, ARM and AMD have also endorsed these systems.
CDNS’ Inorganic Growth Strategy on Point
Acquisitions have played a pivotal role in driving topline expansion for CDNS. Last year, CDNS acquired Intrinsix Corporation and SerDes and memory interface PHY IP business from Rambus. In 2022, the company acquired four companies: OpenEye Scientific Software, Future Facilities, Pointwise and NUMECA.
In June 2024, Cadence completed the acquisition of Switzerland-based BETA CAE, a leading provider of engineering simulation solutions. The acquisition will enhance Cadence's Intelligent System Design strategy by broadening its multiphysics system analysis offerings and helping it enter into the structural analysis sector. In January 2024, the company purchased California-based embedded software and system-level solutions provider Invecas, Inc.
Revenues for 2024 are now projected to be in the range of $4.6-$4.66 billion compared with the previous guidance of $4.56-$4.62 billion. It includes $40 million in revenues (at the midpoint) from the acquisition of BETA CAE.
Accelerating Design Activity Bodes Well for CDNS
Design activity continues to be solid, owing to transformative generational trends such as hyperscale computing, 5G and autonomous driving, bolstered by the proliferation of AI. CDNS solutions are also witnessing strong adoption as system companies build their silicon amid increasing chip complexity.
Customers have been significantly increasing their R&D budgets in AI-driven automation. This bodes well for the Cadence.AI portfolio. CDNS remains focused on embedding cutting-edge AI capabilities across its SDA, EDA and digital biology offerings.
Should CDNS Stock be in Your Portfolio?
Strong end-market demand and opportunities presented by the rapid proliferation of AI applications are positives for Cadence but the external risks warrant caution in the near term. The company’s falling estimates and expensive valuation are concerning.
Consequently, it might not be a prudent investment decision to bet on the stock, which carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, stakeholders and investors already owning the stock could stay put as long-term prospects for CDNS appear promising amid increasing design activity in the semiconductor space.
Zacks Investment Research
TELUS Corporation TU recently announced a C$9.6 million investment in Quebec's Chaudière-Appalaches region. This investment will be supported by an additional C$2.7 million from the government of Quebec and C$2.2 million from the Canadian Radio-television and Telecommunications Commission (“CRTC”), enabling the installation of 20 new 5G wireless sites in the area.
The government of Quebec's investment, announced in April 2024, will support the development of 16 new sites to boost cellular coverage in the region. While planning and preparatory work will begin this year, TELUS anticipates that the first sites will be operational by 2025. Additionally, as part of the CRTC Fund, detailed last year, two new wireless sites will be activated in Saint-Pamphile and Saint-Adalbert by the end of the year. The activation of a second site in Saint-Adalbert and another in Saint-Paul-de-Montminy will commence in 2025.
The combined financial contribution will facilitate the implementation and upgrade of TELUS' network, improving wireless connectivity in rural and remote areas. In the fourth quarter of 2023, the company projected a capital expenditure of C$2.6 billion for 2024. This guidance was reaffirmed in the second quarter of 2024, underscoring the company’s commitment to its planned investment strategy for the year.
TELUS Aims to Enhance Innovation & Connectivity Across Quebec
TELUS remains focused on its corporate social responsibility. The company aims to invest C$73 billion in Canada by 2028, including C$10 billion specifically for Quebec. As of June 30, 2024, TELUS provided 5G network coverage to nearly 32 million Canadians, representing more than 86% of the population.
In August, TELUS unveiled new additions to EnContinu+, a streaming bundle tailored specifically for Quebec residents. The new offering aims to boost the entertainment experience for TELUS and Koodo customers. Subscribers can enjoy a diverse selection of content, including French language programs and popular international shows and movies while benefiting from savings of up to 20% on the individual package.
In July, the company announced a C$6.6 million private investment in the North Shore region of Quebec, supported by an additional investment of C$6.8 million from the government of Quebec and C$5.5 million from CRTC for the addition of roughly 10 new 5G wireless sites in this region.
TELUS Corporation Price and Consensus
TELUS Corporation price-consensus-chart | TELUS Corporation Quote
Since 2023, the TELUS Friendly Future Foundation has contributed nearly $100,000 to local organizations in the Chaudière-Appalaches region, supporting projects that benefit youth. Beneficiaries include the Association Renaissance des Appalaches, Maison de la Famille Nouvelle-Beauce and Alliance Jeunesse des Chutes-de-la-Chaudière.
Vancouver, British Columbia-based TELUS is one of the leading telecom carriers in Canada (the largest in western Canada), with more than C$20 billion in annual revenues and 19 million customer connections. It provides wireless, wireline and Internet communications services for voice and data to businesses and consumers.
TU’s Zacks Rank & Stock Price Performance
TU currently carries a Zacks Rank #3 (Hold). Shares of the company have gained 3.8% in the past year compared with the sub-industry's growth of 6.8%.
Stocks to Consider
Some better-ranked stocks from the broader technology space are Manhattan Associates, Inc. MANH, ANSYS, Inc. ANSS and Adobe Inc. ADBE. MANH presently sports a Zacks Rank #1 (Strong Buy), whereas ANSS & ADBE carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Manhattan Associates delivered an earnings surprise of 26.6%, on average, in the trailing four quarters. In the last reported quarter, MANH pulled off an earnings surprise of 22.9%. The Zacks Consensus Estimate for MANH has increased 9.2% in the past 60 days to $4.26.
ANSYS delivered an earnings surprise of 4.8%, on average, in three of the trailing four quarters. In the last reported quarter, ANSS pulled off an earnings surprise of 28.9%. It has a long-term earnings growth expectation of 6.4%.
Adobe delivered an earnings surprise of 2.6%, on average, in the trailing four quarters. In the last reported quarter, ADBE pulled off an earnings surprise of 2.7%. It has a long-term earnings growth expectation of 13%.
Zacks Investment Research
NetApp’s NTAP shares have been performing well on the trading front, with a gain of 33.7% year to date compared with the sub-industry and the S&P 500 composite’s growth of 33.4% and 18.1%, respectively.
Strong financial performance is driving the stock’s trajectory. The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters with an average surprise of 8.6%.
Closing at $117.86 as of yesterday’s trading session, NTAP stock is currently trading 12.7% below its 52-week high of $135.01 attained on July 10, 2024. This reflects further upside potential. Increasing demand across the all-flash and cloud storage portfolio is emerging as a tailwind for NetApp’s top line.
Year-to-Date Price Performance
What is Driving NTAP’s Performance?
NetApp is witnessing higher demand from customers for its portfolio of modern all-flash arrays, especially the C-series capacity flash and ASA block-optimized flash. The new all-flash A-series is also picking up momentum. These enterprise storage products will allow users to boost workloads, including traditional enterprise applications and Gen AI. The company expects the new AFF A-series, along with its C-series and ASA products, to capture further share in the all-flash market.
Also, Keystone’s storage-as-a-service offering is gaining significant traction, with revenues increasing more than 60% year over year in fiscal first-quarter 2025. The company’s All-Flash Array Business’s annualized net revenue run rate was $3.4 billion, up 21% year over year in the same quarter. Total billings rose 12% year over year to $1.45 billion.
Strengthening demand for NetApp’s solutions in flash, block, cloud storage and AI bodes well. In the fiscal first quarter, the company won more than 50 AI and data lake modernization deals. NTAP now expects full-year revenues in the range of $6.48-$6.68 billion, up 5% year over year at the mid-point. Earlier it projected sales in the band of $6.45-$6.65 billion.
The company now forecasts non-GAAP earnings per share for fiscal 2025 to be between $7 and $7.2, up 10% year over year at the mid-point. Earlier, it projected non-GAAP earnings between $6.8 and $7 per share. For fiscal 2025, NetApp continues to expect non-GAAP gross margin in the range of 71-72%. Non-GAAP operating margin is projected in the band of 27-28%, unchanged from the prior view.
However, the uncertain macroeconomic environment and cautious IT spending amid stiff competition in the all-flash business remain concerning.
NTAP’s Healthy Capital Allocation Strategy
NetApp’s cash, cash equivalents and investments were $3.02 billion and long-term debt was $1.244 billion as of July 26, 2024. For the fiscal first quarter, the company generated net cash from operations was $341 million and free cash flow was $300 million (free cash flow margin of 19.5%). Net cash balance provides the required flexibility to pursue any growth strategy, whether through acquisitions or otherwise.
A strong balance sheet helps NetApp to continue its shareholder-friendly initiatives of dividend payouts. The company returned $507 million to its shareholders as dividend payouts and share repurchases in the fiscal first quarter. NTAP has $1 billion worth of shares remaining under its existing authorization.
NTAP also announced a dividend of 52 cents payable on Oct. 23 to shareholders of record as of the close of business on Oct. 4.
Impressive Estimates Activity
The Zacks Consensus Estimate for NTAP’s fiscal 2025 and 2026 revenues is pegged at $6.57 billion and $6.85 billion, respectively, which indicates year-over-year growth of 4.9% and 4.2%.
The Zacks Consensus Estimate for earnings per share for fiscal 2025 and 2026 is pegged at $7.03 and $7.49, respectively, which implies a rise of 8.8% and 6.4% year over year.
The Zacks Consensus Estimate for fiscal 2025 and 2026 EPS has increased 2.5% and 2%, respectively, in the past 60 days, reflecting analysts’ optimism.
NTAP’s Favorable Rank & Growth Score
With healthy fundamentals and strong growth opportunities, this Zacks Rank #2 (Buy) stock appears to be a solid investment option at present.
Apart from a favorable rank, NTAP has a Growth Score of A. Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 (Strong Buy) or 2 and a Growth Score of A or B offer solid investment opportunities.
Other Stocks to Consider
Other top-ranked stocks worth consideration in the broader technology space are Manhattan Associates MANH, Adobe ADBE and ANSYS ANSS. While Manhattan Associates sports a Zacks Rank #1 (Strong Buy), Adobe and ANSYS carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MANH’s 2024 EPS is pegged at $4.26, unchanged in the past 30 days. MANH’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 26.6%. The stock has surged 33.9% in the past year.
The Zacks Consensus Estimate for Adobe’s fiscal 2024 EPS is pegged at $18.18, increased 2 cents in the past 30 days. ADBE’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 2.6%. The long-term earnings growth rate is 13.1%. Its shares have declined 2% in the past year.
The Zacks Consensus Estimate for ANSS’ 2024 earnings is pegged at $9.96, unchanged in the past 30 days. ANSS’ earnings beat the Zacks Consensus Estimate in three of the last four quarters while missing the mark once, with the average surprise being 4.8%. Its shares have gained 2% in the past year
Zacks Investment Research
Wix.com’s WIX shares have been performing well on the trading front, with a gain of 65.4% in the past year compared with the S&P 500 composite and sub-industry’s growth of 25.9% and 22.9%, respectively.
Strong financial performance is driving the stock’s trajectory. The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters with an average surprise of 29.8%.
Closing at $156.59 as of yesterday’s trading session, WIX stock is currently trading 12.4% below its 52-week high of $178.65 attained on June 6, 2024. Technical indicators are supportive of Wix’s strong performance. The stock is trading above its 100-day and 200-day moving averages, indicating robust upward momentum and price stability.
One-Year Price Performance
Headquartered in Tel Aviv, Israel, WIX is a cloud-based web development platform. It offers solutions that enable businesses, organizations, professionals and individuals to develop customized websites and application platforms and grow the companies’ online presence.
WIX’s Focus on AI-Powered Solutions to Drive Growth
Increasing adoption of the product portfolio, especially various artificial intelligence (AI) products and WIX Studio, has been driving the company’s performance. The addition of new features and enhancements to WIX Studio is driving its uptake. Management highlighted that the number of Studio accounts and rate of new Partners joining the Wix platform through Studio continue to better expectations.
The addition of new AI-powered offerings to its product portfolio is another tailwind. WIX is focusing on embedding AI assistants across its platform and has released 17 AI business assistants. The company recently launched its latest AI Theme Assistant which provides users with personalized recommendations and real-time advice, allowing them to easily customize their website’s theme. This tool is part of a broader suite of innovations from Wix, which is aimed at supporting users throughout every phase of their online journey, from initial ideas to final execution.
In June 2024, Wix launched advanced AI creation capabilities for its mobile app builder. The initiative is set to empower users to effortlessly craft professional and fully customizable applications. By leveraging AI technology, it revolutionizes the way business apps for iOS and Android can be designed and altered.
The company also expanded the availability of its AI Website Builder in different languages. Besides English, AI Website Builder is now available to global users in French, German, Portuguese, Spanish, Italian, Japanese, Turkish and Korean. This initiative aids users in building websites in their preferred language.
WIX is focusing on generative AI as this represents a significant business growth driver. In the second quarter of 2024, bookings revenues came at $458.4 million. This 15% year-over-year improvement was driven by solid uptake of WIX Studio, AI product suite and expanding commerce platform in this quarter. Total revenues increased 12% year over year to $435.7 million and beat the Zacks Consensus Estimate of $433.6 million. The expansion of the AI product portfolio is expected to drive the top line for WIX and further boost the stock.
WIX’s Robust Outlook
Continued strong momentum in the first half of 2024 led WIX to upgrade the outlook for bookings, revenues and free cash flow for the year.
Total bookings are expected to be between $1,802 million and $1,822 million compared with a previous range of $1,796-$1,826 million.
Total revenues are now expected to be in the range of $1,747-$1,761 million (previous projection: $1,738 million to $1,761 million).
Free cash flow, excluding headquarters costs, is expected to be between $460 million and $470 million, or 26-27% of revenues in 2024. Earlier, free cash flow was expected in the range of $445-$455 million, or 26% of revenues.
Estimates Northbound for WIX
The estimates have also moved northward in the past 60 days. The Zacks Consensus Estimate for 2024 and 2025 earnings per share (EPS) has increased 7.3% and 2.4%, respectively, reflecting analysts’ optimism.
The estimated figures for 2024 and 2025 EPS, $5.86 and $6.93, respectively, indicate a rise of 33.5% and 18.3% from the prior-year actuals. The long-term earnings growth rate is 22.4%.
The Zacks Consensus Estimate for WIX’s 2024 and 2025 revenues is pegged at $1.75 billion and $1.99 billion, respectively, which indicates growth of 12.4% and 13.2% from the year-ago levels.
WIX’s Attractive Valuation
WIX presents a compelling investment opportunity with its attractive forward 12-month price-to-sales ratio of 4.47, significantly lower than the industry average of 10.72 observed in the past year. Its forward 12-month price-to-sales ratio positions WIX as a value-driven choice with significant upside potential.
WIX Faces Certain Headwinds
However, unfavorable foreign currency movement and weak global macroeconomic conditions are headwinds.
Increasing investments in product development, infrastructure and platform, along with stiff competition in the e-commerce marketplace, remain concerning for this Zacks Rank #3 (Hold) stock.
Stocks to Consider
Some better-ranked stocks worth consideration in the broader technology space are Manhattan Associates MANH, Adobe ADBE and ANSYS ANSS. While Manhattan Associates sports a Zacks Rank #1 (Strong Buy), Adobe and ANSYS carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MANH’s 2024 EPS is pegged at $4.26, unchanged in the past 30 days. MANH’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 26.6%. The stock has surged 33.9% in the past year.
The Zacks Consensus Estimate for Adobe’s fiscal 2024 EPS is pegged at $18.18, increased by 2 cents in the past 30 days. ADBE’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 2.6%. The long-term earnings growth rate is 13.1%. Its shares have declined 2% in the past year.
The Zacks Consensus Estimate for ANSS’ 2024 earnings is pegged at $9.96, unchanged in the past 30 days. ANSS’ earnings beat the Zacks Consensus Estimate in three of the last four quarters while missing the mark once, with the average surprise being 4.8%. Its shares have gained 2% in the past year.
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