By Sam Boughedda
Investing.com -- Shares of Wix.Com Ltd (NASDAQ:WIX) plunged more than 27% Wednesday after the company reported its earnings before the opening bell, missing revenue expectations and not providing annual guidance due to higher volatility in demand.
The cloud-based website builder announced a loss per share of 37 cents on revenue of $328.34 million. Analysts polled by Investing.com anticipated a per-share loss of 37 cents on revenue of $331.95 million.
However, the company said that due to heightened volatility in demand for online services over the last year and a half because of Covid, it is not able to provide a forecast "with the same level of confidence" as it has historically been able to pre-Covid, despite fundamentals remaining strong.
They added: "as of today, we expect total revenue in Q1 2022 to be $338M - $343M, representing 11% - 13% y/y growth. Given Q1 2021 saw revenue grow 41% y/y, it is the most difficult y/y comparable we face in 2022, and we expect y/y growth of total revenue to accelerate each quarter through the end of 2022."
The report prompted Guggenheim analyst Ken Wong to immediately downgrade the stock to neutral from buy. The analyst said in a note that he interprets the lack of guidance as a sign of "sub-seasonal growth" despite acceleration expectations, and he believes Wix shares will be categorized as a "value trap" for the foreseeable future.