This Fund Just Made a $100 Million Bet on Wix as Fundamentals Improve After Steep Stock Slide

Investment firm No Street GP LP disclosed a new, significant position in Wix.com, acquiring 550,000 shares valued at $97.7 million as of September 30, making it a top-five holding representing 6.4% of their U.S. equity portfolio. This strategic investment, despite Wix's stock underperforming the broader market by 32% over the past year, suggests No Street's conviction that the company's operational reset is largely complete. This outlook is supported by Wix's recent Q2 revenue growth of 12%, accelerating new-cohort bookings, robust free cash flow generation, and strategic expansion into application development, indicating a potential turnaround for the high-margin SaaS model.

Analysis

No Street GP LP has established a significant new position in Wix.com (WIX), acquiring 550,000 shares valued at $97.7 million as of September 30, making it 6.4% of their U.S. equity holdings and a top-five position. This investment signals a strong conviction despite WIX shares being down 32% year-over-year and significantly underperforming the S&P 500's nearly 15% gain over the same period.

The firm's history of investing in high-volatility compounders suggests a belief that the operational reset for WIX is largely complete. This outlook is supported by Wix's Q2 revenue growth of 12% to $489.9 million, driven by accelerating new-cohort bookings which grew 14% year-over-year and exited July above 20%.

Wix also demonstrated robust financial health, generating $147.7 million in free cash flow and executing $100 million in share repurchases at an average price of $154.69. Furthermore, the acquisition of Base44 is expected to expand its reach into application development, potentially adding $40-50 million in annual recurring revenue (ARR) by year-end.

These factors, including improving cohorts and durable cash flow, indicate a potential rebound for Wix's high-margin SaaS model. No Street's move suggests a view that the current valuation, despite expected continued volatility, may underestimate the company's next phase of growth.

Key Decisions for Investors

• Investors should closely examine the rationale behind No Street GP LP's significant new position in Wix, considering it a potential signal of a turnaround for the underperforming stock.
• Monitor Wix's new-cohort bookings growth, free cash flow generation, and the contribution from strategic acquisitions like Base44 as key indicators of sustained operational momentum.
• Evaluate the current valuation against the company's improving fundamentals and expanded addressable market, while preparing for potential continued volatility in the stock price.