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In this email:

• 105x P/E?! Are You Insane?! 🤯 

• Make Money from Your Phone 📱 

105x P/E?! Are You Insane?! 🤯 

What does a perfect earnings report look like?

It’d probably be something like big fat green numbers, expanding margins & a promise of huge growth down the road. That’s exactly what Wix have just dropped.

Does that make it a buy? Or are we looking at another over hyped SaaS play? Let’s figure it out. 🧠 

HOW THEY PRINT MONEY 💰️

If you’ve ever built a website, you’ll know Wix. Drag. Drop. Publish. Boom. You’re in business. But here’s what most people don’t realize.

Wix has moved on from being a simple site builder into a full scale business automation platform. Think Shopify’s e-commerce + Squarespace’s design + the magic of AI magic all rolled into one neat package.

Ta-da! 🪄 You have Wix.

Here’s why it’s so popular:

✅ AI That Does the Work for You. Wanna build a site? Wix’s AI will literally do it for you. Want SEO optimization? Done. Automated customer service? Also done. It’d be quicker to tell you want you can’t automate… like these emails you get from me, straight from the heart. 💕 Anyway…

✅ Scalability = More Cash, Fewer Costs. Once Wix builds its platform, adding new users is practically free. More users = higher margins. And that is the power of SaaS.

✅ Locked-In Customers = Subscription Handcuffs Now they’ve created an ecosystem, businesses don’t just use Wix. They live on it. Everything they need is here. That’s a perfect recipe for every investors wet dream. Recurring revenue & lower churn.

Q4 2024 EARNINGS: BY THE NUMBERS 📊

📈 Revenue up 14% YoY. Pulled in $460.5M this quarter. Higher prices & more users turned out to be a pretty deadly combo.

💪 Operating margins jumped from 16% to 22%. SaaS magic back at it again. Scaling revenue with practically zero extra cost.

🤖 AI for Max Efficiency. AI automation is cutting costs in a big way. AI now does all the heavy lifting & humans jump in as & when needed.

THE BULL & BEAR CASE

🔥 Bull case:

• AI continues to boost efficiency & cut costs

• Margin expansion = sustainable profitability

• Recurring revenue keeps stacking up

• Investors start seeing Wix as a cash-flow machine, not just a website builder

🐻 Bear case:

• AI features flop &users don’t adopt them

• Competitors (Shopify, Squarespace) start eating up market share

• The macro environment weakens & small businesses cut spending

THE VALUATION HEADACHE 🧠

Here’s where things get a bit tricky. Wix is expensive. I’m talking a 105x forward P/E expensive.

When I first saw that I was ready to scrap all the research & put Wix in my “no” pile. There’s got to be a better option out there, right?

But I then I did a little more digging.

👉 EBITDA is expected to grow 97.67% next year. If margins keep expanding, Wix could actually grow into its valuation. Like when my mum would buy me clothes 3 sizes to big so I got the most value out of them…
👉 P/S ratio of 7.48x . It’s not exactly a bargain right now. Still cheaper than Shopify.
👉 High-growth SaaS stocks live and die by margins. If Wix keeps scaling like this, today’s valuation might not look so crazy in 12 months.

MY PLAN 🗺️ 

Right now, wix is sexy but expensive. A lot like the women I pursue.

Hyper growth SaaS with margins that are growing at a super impressive rate. If AI automation keeps working, Wix could look very different in a few years. It’ll be leaner, meaner & printing free cash flow like a central bank in a pandemic.

But…

For the buy to make sense, you have to believe the growth story. Without that growth, this stock is absolutely not a buy at current valuations.

I’m a glass half full kinda guy. I like how sticky Wix is once it’s got someone onboarded. I don’t think that changes. And I do believe in AI efficiency. They’ve already shown it works in their business model.

In a perfect world, I’d want a pullback to take some off the risk off but meh. I’m not gonna go crazy on it. A small part of the portfolio to begin with, about 0.5%.

Now to keep a close eye on execution & that EBITDA over the next 12 months… 👀 

Make Money from Your Phone 📱 

This tech company grew 32,481%...

No, it's not Nvidia... It's Mode Mobile, 2023’s fastest-growing software company according to Deloitte.

Just as Uber turned vehicles into income-generating assets, Mode is turning smartphones into an easy passive income source, already helping 45M+ users earn $325M+ through simple, everyday use.

They’ve just been granted their stock ticker by the Nasdaq, and you can still invest in their pre-IPO offering at just $0.26/share.

Invest Now

*Mode Mobile recently received their ticker reservation with Nasdaq ($MODE), indicating an intent to IPO in the next 24 months. An intent to IPO is no guarantee that an actual IPO will occur.
*The Deloitte rankings are based on submitted applications and public company database research, with winners selected based on their fiscal-year revenue growth percentage over a three-year period.
*Please read the offering circular and related risks at invest.modemobile.com.

That’s all! See you same time next week 👋 

P.S Hit reply & let me know what you thought of this weeks newsletter. All feedback is welcomed ❤️