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  5. SHOP: Hi, Can you please compare these two stocks? [Shopify Inc. Class A Subordinate Voting Shares]
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Q: Hi,

Can you please compare these two stocks? Which do you prefer today? I realize you do not follow wix as closely, but it seems like they have very similar business models and product offerings while wix trades at a lower multiple.


Asked by Adam on August 16, 2023
5i Research Answer:

WIX has a similar business model to SHOP of providing a cloud-based platform to create websites, allowing small businesses to build their online stores through a subscription, WIX also provides payment solutions to operate. Having said that, WIX’s growth was much slower than SHOP (even in the COVID boom). As of the most recent quarter, while SHOP grew its top line by 30%, WIX only grew around 13%. Some encouraging signs from WIX are the company is repurchasing shares quite aggressively, and some activist investors are involved with the company. We think WIX will do fine. It has a decent balance sheet and is cheaper than SHOP, but we still prefer SHOP at this point.