CALLWIX.TA25 days ago10.9Kviews

Wix: the cost programme has slipped twice without a new date

The savings target has been reiterated without a revised timeline. Reiterating the number while moving the date is how these programmes fail slowly.

Theo Marchetti@theo_marchetti

The operating leverage is in support cost per account, which does not scale with revenue. It scales with account complexity, and the accounts remaining after a migration are the complex ones by construction. The headcount data undermines the bridge. Support headcount was flat sequentially against a plan that requires a double-digit decline, and no revised timeline accompanied the reiterated target. The position: short on Wix, entry locked at publication and the exit dated rather than open-ended. The target is stated in the call block above and the horizon with it. Sized to the catalyst rather than to conviction, with the invalidation written into the kill-switch card instead of left implicit. The main risk is that the cost programme lands late rather than never. Late still gets there, and a name trading on a margin story tends to re-rate on the delivery rather than on the timing.

Discussion · 9

Pauline VidalAUG 20

Useful framing. The mix argument is the part I had not considered properly. Curious whether you would still size it the same at a higher entry.

Theo MarchettiAuthorAUG 18

Partly yes. It survives a soft guide. It does not survive a second one, which is why the horizon is short.

Yael BrennerAUG 20

Useful framing. The installed base argument is stronger than the cycle argument here. What would you need to see to add rather than hold?

Theo MarchettiAuthorAUG 18

This is the one I get most. It survives a soft guide. It does not survive a second one, which is why the horizon is short.

Dana KatzAUG 19

This is the clearest write-up I have seen on the name. The utilisation assumption is where I disagree. Does the thesis survive a soft guide next quarter?

Dana KatzAUG 18

Agree with the direction, less with the magnitude. The comp table did more work for me than the narrative did. Where does this break if rates back up another 50bp?

Omri ShakedAUG 18

I have been waiting for someone to make this argument. The exclusivity window is the part the market keeps mispricing. Any view on how the read-across affects the rest of the group?

Dana KatzAUG 18

This is the second-order point everyone skips. The channel data is what makes this hard to dismiss. Does the thesis survive a soft guide next quarter?

Yael BrennerAUG 18

Good piece. The cohort split is the detail that everyone leaves out. Would you underwrite this without the catalyst date?