What Happened?
Shares of website building platform Wix (NASDAQ: WIX) fell 25.8% in the afternoon session after the company reported disappointing first-quarter 2026 results that missed analyst expectations for profit.
The company posted adjusted earnings of $0.68 per share, falling 44.2% short of the consensus estimate of $1.22. Revenue for the quarter was $541.2 million, which was roughly in line with the anticipated $543.6 million.
According to the company's report, the earnings miss was partly due to acquisition costs. In response to the weak results, the stock fell to a 52-week low of $55.88. Looking ahead, Wix maintained its full-year 2026 outlook and provided a second-quarter revenue forecast that also called for mid-teens percentage growth, suggesting no significant acceleration in the near term.
The shares closed the day at $55.25, down 27.2% from previous close.
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What Is The Market Telling Us
Wix’s shares are extremely volatile and have had 32 moves greater than 5% over the last year. But moves this big are rare even for Wix and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 3.7% on the news that the latest Consumer Price Index (CPI) report came in hotter than expected, signaling that inflation remained stubbornly high.
The April CPI data revealed a 3.8% annual increase, surpassing economists' forecasts. This report is a key measure of inflation, tracking the average change in prices paid by consumers for goods and services. The persistent inflation is significant because it dampens expectations for the Federal Reserve to cut interest rates.
Higher interest rates for a longer period tend to negatively impact growth-oriented sectors like technology and software, as they make the companies' future earnings less valuable in today's terms. With the prospect of rate cuts diminishing, investors reassessed valuations, leading to a broad sell-off across the tech sector.
Wix is down 44.9% since the beginning of the year, and at $55.65 per share, it is trading 70.7% below its 52-week high of $189.61 from May 2025. Investors who bought $1,000 worth of Wix’s shares 5 years ago would now be looking at only $250.68.
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