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Why Wix Stock Was Up Nearly 14% in April

By Jon Quast - May 5, 2021 at 10:46AM

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The company continues to add new products, and Wall Street loves it.

What happened

Shares of (WIX 2.16%) were up 13.8% in April, according to data provided by S&P Global Market Intelligence. Most of the stock's upward move came later in the month, although it's unclear what the catalyst was. The company did have news, but not news that adequately explains why it was an outperformer during the month.

So what

On April 20, Wix announced a brand-new product called Spaces by Wix. This mobile product is designed to turn a business website into an app experience, and it does sound like an important product considering how much business takes place on our phones these days. But that doesn't seem to account for the stock's 14% gain last month. Indeed, Wix frequently launches new products like this to meet its customers' evolving needs, so the market should be used to it.

A businesswoman draws an upward arrow over a bar chart displayed on a transparent touchscreen.

Image source: Getty Images.

Later in the month, an analyst with Needham started their coverage of Wix with a buy rating and a $340-per-share price target, according to The Fly. While this bullish shoutout likely contributed to some of the stock's gains in April, the stock was already up about 10% for the month by then. Therefore, this wasn't a primary catalyst.

To summarize, there were a couple positive developments for Wix in April. But they don't seem to completely explain why the stock was up nearly 14%. But that's a reality with the stock market -- a movement up or down doesn't always have a logical explanation. 

WIX Chart

WIX data by YCharts

Now what

Wix is scheduled to report earnings for the first quarter of 2021 on May 12. The company guided for Q1 revenue of $291 million to $296 million, good for growth of 35% to 37% from the previous year. For perspective, that's an acceleration from the almost-22% revenue growth it posted for 2020, suggesting business is booming for Wix.

One thing to watch in the coming year is Wix's nascent payments business. The company helps businesses build an online presence, so continuing to develop its payments business makes a lot of sense. I expect this is something management will discuss on the Q1 conference call. 

Jon Quast owns shares of The Motley Fool owns shares of and recommends The Motley Fool has a disclosure policy.

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