Shares of website management software outfit Wix.com (NASDAQ:WIX) continue to get blasted this year. After another downturn, share prices are down 36% over the past 12-month stretch and 50% off of all-time highs. But this has been a fantastic growth story since the company made its public debut in late 2013.

Some uncertainty could lead some investors to conclude it's time to sell, but there are still many more reasons to buy after this really steep dip.  

One reason to sell Wix stock

Wix's profitability has taken a few hits this year and that has some investors worried. Wix stock has been crushed by a combination of rising interest rates (which lower the long-term value of profits) and the company's lower bottom line this year as it spends to promote more growth. Full-year 2021 expected free cash flow has been forecast to be just $35 million to $40 million, down from $129 million in 2020. New headquarters construction, a handful of small acquisitions, and the development of new software capabilities (like an easy-to-use app builder to complement its web development suite of services) have all weighed on the profitability outlook.

Two people working on a laptop and tablet.

Image source: Getty Images.

As a result of this falling profitability, the premium on Wix stock has risen even though the actual stock price has fallen precipitously. As of this writing, shares trade for 150 times trailing 12-month free cash flow.

Three reasons to buy Wix stock

In spite of evaporating profits, Wix is still a compelling growth story. The company is getting plenty of growth from its spending this year. Here are three reasons to stay optimistic.

1. Revenue remains strong: Management has said that the emergence of the COVID-19 delta variant this past summer had an effect on business. Wix caters to small businesses, individual professionals, and the like. New lockdowns in some markets were delaying digital projects among some customers. The company thus downgraded its full-year revenue outlook by about $20 million when it reported on Q2 2021 over the summer. However, full-year expectations for sales to be at least $1.25 billion represents a 27% year-over-year increase. In this case, "slower" does not mean "slow." Wix is still doing more than fine.  

2. Business solutions are a promising endeavor: Wix's bread and butter is selling subscriptions to its no-code software platform, unlocking the ability for everyone to build and manage a website even with little to no knowledge of software programming. In Q2, those subscriptions represented three-quarters of revenue and grew at a 24% year-over-year clip.

Business solutions -- add-ons to the base platform subscription fees -- are moving even faster at Wix. Though just one-fourth of sales, the segment hauled in $80.5 million in Q2, up an impressive 75% from the same period last year. From digital payments to shipping services to marketing tools, Wix is building a powerful hub to help its users manage all of their basic operations. These business solutions could help Wix maintain its momentum for years to come as it helps entrepreneurs and small businesses get updated for the cloud computing era.

3. Management has confidence in the business: As part of a strategy to reassure investors in Wix's long-term viability, a $200 million share repurchase program was recently completed -- representing about 1.6% of all shares outstanding. It's a small gesture, but it indicates the top team's belief that the dip in profits this year will only be temporary in nature.  

The growth story isn't over yet

Wix can certainly afford the buyback. At the end of June, it had $927 million in cash and short-term equivalents on the books, and another $527 million in long-term marketable securities. 2021 has been a tumultuous year for Wix, but this growth story isn't over yet. If the company can continue to expand in 2022, a rally in share price could be right around the corner.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.