Wix.com (WIX) reported a challenging Q1 as weakness in its Partner business and accelerating investment in Base44 continued to pressure margins and free cash flow, RBC Capital Markets said in a note emailed Thursday.
RBC said the slowdown in the Partner channel was the clearest signal yet that artificial intelligence driven vibe coding tools are beginning to affect agencies and traditional web design workflows.
While Base44 continues to grow rapidly, the business carries higher marketing and compute costs as Wix.com aggressively invests to capture demand, weighing on overall profitability, RBC said.
The company maintained its 2026 bookings and revenue outlook for a mid-teens growth, while expense headwinds were noted as driving free cash flow guidance lower, the firm said.
RBC downgraded Wix.com to sector perform from outperform and lowered its price target on the stock to $60 from $90.
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