Morgan Stanley upgrades Wix and Semrush on growth, AI potential

Investing.com
01-14

Investing.com -- Morgan Stanley upgraded Wix.Com Ltd (NASDAQ:WIX) and Semrush Holdings Inc (NYSE:SEMR) to "Overweight" given their strong growth opportunities and undervalued shares.

The brokerage sees Wix benefiting from AI-driven innovation, particularly for small businesses and creators leveraging tools like generative AI for web design and marketing. Improved subscription growth, operational discipline, and better free cash flow generation support its $276 price target, implying a 25% upside. Wix trades at a discount to peers, with shares undervaluing its potential for faster customer conversion and retention.

Semrush’s role in online visibility management, including SEO and content marketing, positions it for sustained growth. Morgan Stanley (NYSE:MS) highlighted easing headwinds in the small business segment, expanding enterprise opportunities, and improving margins. Semrush's recurring revenue model supports profitable 20%+ revenue growth, with shares trading at a steep discount to peers.

“Improving demand with a cyclical spend recovery and secular tech cycle, conservatism in forward outlooks and discounted valuations relative to broader software drive our positive view on front office software stocks,” analysts wrote.

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