Wix.com Ltd (NASDAQ:WIX) remains bullish on the growth potential of Base44. The website builder "is willing to sacrifice short-term margin for long-term market share gains," according to Needham’s analyst Bernie McTernan.

The Wix.Com Analyst: McTernan reaffirmed a Buy rating, while slashing the price target from $140 to $115.

The Wix.Com Thesis: Base44 ended 2025 with ARR (annual recurring revenues) of $59 million. That’s above the company's guidance of $50 million.

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ARR of Base44 accelerated to $100 million during the first quarter.

"While Base44 gross margins are currently positive, they are negatively impacted by upfront AI inference costs for new users and management expects this headwind to abate throughout the year as well as other cost improvements," McTernan said in the note.

He stated, however, that there continues to be lack of clarity on the asset's "ultimate growth trajectory and margin outlook."

The price target has been reduced to reflect lower free cash flow estimates due to higher investment in Base44, McTernan further said.

WIX Price Action: Shares of Wix.com had risen by 7.35% to $89.94 at the time of publication on Thursday.

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