Speaking of exciting high-growth tech stocks, the 2022 bear market is one of the worst since the dot-com bust in 2000. In fact, rapid rate hikes are what’s driving tech stocks downhill. However, it wasn’t just U.S. tech stocks that suffered during the year. Israel is home to a handful of intriguing innovators who have left hooks to the jaw in this grueling bear market. Website builder Wix.com (NASDAQ: WIX) and cybersecurity software CyberArk (NASDAQ: CYBR) are two of the most interesting Israeli software stocks that may have overdone the tech rout.
Wix: A Potential Leader of the No-Code Revolution
After such a dramatic plunge, Wix is now one of the top Israeli tech stocks I follow. The company offers a wide range of services to help ordinary people set up and run their own professional websites.
No doubt, there are plenty of website builders out there. Many web hosts offer this type of service at home. What sets Wix apart is the ease of use and how the site looks. It’s as if a programmer versed in languages like HTML and CSS designed a website from scratch.
Wix’s website builder has come a long way over the years. The wide range of templates, tools, and the ability to easily customize through Wix’s “smart drag and drop” make the platform the platform of choice for many digital retailers and bloggers.
Over time, Wix’s platform will become more intuitive and feature-rich. Plus, the top website builder is one of the many companies that can grab a slice of the work of front-end web developers and designers as it offers a growing range of cutting-edge tools for non-technical users. Wix and companies like it may very well be leading a no-code revolution.
While Wix has a top-notch product, there are more and more competitors in the website building space. Web hosting workhorse GoDaddy (NYSE: GDDY) is just one of many companies doubling down on website building tools. After all, hosting, domain names, and website building all go hand in hand.
Despite the competition, Wix seems to be the one company best able to stand out. With great management and a greater focus on website building tools (as opposed to generic web services like domains and hosting), the company stands out and can capture most of the market services that haven’t yet jumped to zero or low yards.
Earlier this month, Wix partnered with domain registrar Name.com. Such a deal would even help the playing field for a diversified online game like GoDaddy without requiring Wix to invest heavily in low-growth businesses like domain names.
Recently, Wix stock has been affected by some analyst upgrades. JPMorgan (NYSE Ticker: JPM) analyst Alexei Gogolev praised the site builder, noting the opportunity to “target” many sites not built through top content management service providers. Citigroup and Needham also raised their price target on the stock by more than 10%.
Do analysts think WIX stock is a buy?
Turning to Wall Street, WIX stock is a Moderate Buy based on nine Buys, four Holds, and one Sell rating over the past three months. WIX’s average price target of $98.14 implies an upside potential of 13.6%.
CyberArk: Defensive Growth Worth the Premium Price
As digital threats continue to increase, cybersecurity services are not an area where businesses are looking to cut costs. Just because a recession is looming doesn’t mean hackers will put away their devices. If anything, tougher times may lead to more gray hat (somewhat ethical) hackers donning their (immoral) black hats.
CyberArk, a $6.2 billion Israeli company, has done a good job of maintaining its position relative to its peers. The company focuses on protecting the privileged accounts of the customers it serves. Like most cybersecurity companies, CyberArk has not only been able to post strong growth in a tough economic environment.
CyberArk broke out earlier this month, rising 7% after strong quarterly results and a lift in full-year guidance. Third-quarter earnings season has been tough for many tech companies. CyberArk bucked the trend and could hit new highs as other markets feel the heat of the recession.
The company expects 2022 revenue of $592.5 million to $599.5 million, down from an initial guidance range of $589 million to $601 million. Alongside the rosy forecast, CEO Udi Mokady also made some pretty upbeat comments.He commented on the “strong demand” for “identity security platforms,” noting a high level of “persistence in demand” [its] solution. “
Do analysts think CYBR stock is a buy?
Turning to Wall Street, CYBR stock has a Moderate Buy rating based on nine Buys, four Holds, and one Sell rating over the past three months. CYBR’s average price target of $98.14 implies an upside potential of 19.6%.
Conclusion: WIX and CYBR deserve your attention
Wix and CyberArk are good Israeli tech companies to watch for US investors. While CyberArk stock may fare better in recessionary years, CYBR stock still outperforms Wix by more than 10 times sales. Of course, Wix may be financially sensitive. That said, with such a great platform, stronger secular tailwinds that may outlast macro headwinds, and a modest 3.7x sales multiple, I do think it offers great value.