Last year was a phenomenal one for the Israeli tech scene. Start-ups raised $25 billion in funding between January and November and 33 companies became ‘unicorns,’ valued at over $1b., according to a recent report published by Start-Up Nation. Additionally in 2021, a record-breaking 23 Israeli-based companies debuted on the US stock markets.
It is unlikely that 2022 will see quite the same pace of funding, however, last year’s cash injections could result in a flurry of acquisitions as companies seek to buy smaller businesses to boost their growth.
Meanwhile, investors will be watching closely to see if their investments will pay off. One way to research the well-being of a company is tracking the volume of visitors to its websites.
TipRanks, an Israeli fintech company that provides simplified stock research and that itself announced a $77 million investment in 2021, has created a tool that enables individual investors, existing or potential, to do just this. Although a growth in online users does not guarantee high levels of sales, it is powerful data that can help gauge performance. For investors, this data is particularly powerful ahead of earnings.
Take the case of Netflix. Last month, the streaming giant reported its quarterly earnings. The earnings report showed that the company had failed to meet its revenue and subscriber expectations. Following the announcement, the stock plunged by more than 20%. However, while this spooked investors, a look at Netflix’s monthly website visitors on TipRanks had foreshadowed the disappointing report.
Gaining access to that information ahead of earnings had prepared TipRanks’ users to expect poor performance from Netflix. The same can be said of Meta Holdings (Facebook), which also reported disappointing earnings and had also experienced a drop in website visitors when compared to the same period last year. Ahead of earnings, TipRanks’ website visitors data had hinted at Meta’s poor performance.
We thought it would be interesting to see how Israeli companies are faring, as gauged by a looking at their website visitors.
Tel Aviv-based Wix knows a thing or two about websites. Founded in 2006, and publicly traded on Nasdaq since 2013, the company specializes in providing cloud-based platforms that enable businesses and individuals to create websites or web applications, without having to code.
The company’s stock price has taken a hit over the past 12 months, dropping by over 50%. Does the website traffic to the Wix website give room for optimism?
Back in March of 2021, there were an estimated 47.4 million visits to the Wix website, a 45.51% increase from March 2020, when the COVID pandemic was tightening its grip. Between March 2020 and March 2021, the company’s stock rose by 176.95%, rising in sync with the company’s website visits. However, since April 2020, when comparing visits to the Wix website on a month-by-month basis, 2021 consistently had less traffic, matching the concurrent drop in stock price.
THERE IS some good news, though: An uptick in visits at the end of 2021 might suggest moderate improvement in revenues in the upcoming quarters. Indeed, the company has some interesting long-term growth prospects. It is partnering with payment processing giant Paypal to offer payment/credit solutions for Wix eCommerce merchants in the US, in a potential game-changer.
Additionally, a partnership with Deepcrawl will give Wix users the ability to monitor their websites, including by automatically checking for coding errors that could lead to reduced website performance and poor search results. While analysts’ opinions are mixed, the stock has a “moderate buy” rating consensus, according to TipRanks, and the average analyst price target indicates more than an 80% upside potential over the next 12 months.
Another Tel Aviv-based software company, WalkMe, is a cloud-based digital adoption platform that helps companies simplify online user experience. It held its IPO in June 2021, and financially, the company is firing on all cylinders. During the third quarter of 2021, WalkMe’s revenue totaled $50.6m., a 31% year-over-year increase.
This increase in revenue has gone hand-in-hand with a jump in visits to the WalkMe website. In the final quarter of 2021 (October to December), there were an estimated two million visitors, an increase of almost 220% when compared to the same period in 2020. However, despite an increase in revenue and website visitors, the stock’s price has dropped by 40% since the IPO. The increase in traffic in the quarter that WalkMe is yet to report could indicate that the company is expected to perform well in upcoming earnings. If this does happen, the stock price could rise again.
What do the experts say? Wall Street analysts are optimistic about WalkMe’s potential in 2022. The company has a “strong buy” analyst rating consensus and an average price target of $32, representing more than an 85% upside potential.
Helping WalkMe stay ahead of the competition is the company’s alliance with Deloitte, a firm that provides auditing, consulting, tax and advisory services to more than 7,000 private companies. Through its newly created Digital Adoption Services business, Deloitte is providing solutions together with WalkMe.
According to Constellation Research, digital transformation is the top budget priority for chief information officers. However, there’s a clear demand among businesses for the digital adoption platforms that WalkMe and Deloitte are setting out to meet with this alliance.
Both Wix and WalkMe are scheduled to report earnings on February 16.