The frustration of building a website has eased over the years with the assistance of third-party tools, but putting together a well-crafted site still remains a challenge for many small business owners and hopefuls trying to brand new companies.
Since 2006, tools such as those developed by Wix.com (WIX - Get Report) have saved many computers from flying out of frustrated site builders' windows, and its latest, artificial intelligence-backed version has analysts excited. Since the announcement of this new product earlier this week, shares of Wix have risen 3.7% to $29.14. So far this year, Wix shares are up 20%.
Analysts are encouraged by the rigorous roll-out of the new web-building tool ADI, or artificial design intelligence, that was detailed at an analyst's day early Thursday.
Jason Helfstein of Oppenheimer & Co. increased his price target on WIX from $32 to $37 Thursday morning, as did Sterling Auty with J.P. Morgan, who increased his price target from $32 to $40.
Compared to last year's first quarter, the cloud-based web development platform's revenue has increased by 38% to $61.6 million.
"Even with the move higher in the stock this year, there is still a lot more upside potential left in our opinion," Auty noted.
Wix's AI-run platform creates web and mobile sites with a series of questions that identify the type of business a user is designing for, the business name and location to search for existing online accounts and basic design preferences that can be tailored.
The new feature is free until the user wants to buy a subscription with Wix, which eliminates .wix.com in the URL. This strategy has contributed to involving smaller businesses and users interested in trying out new internet tools.
Wix's VP of Investor Relations, Joe Pollaro, said the AI part of the tool has been evolving since the company started back in '06. With millions of users generating websites over 10 years, Pollaro said Wix had created a database that now houses content that users prefer when making websites. ADI will change and adapt with individual user preferences over time as well, Pollaro said.
Using the artificial intelligence tool will ultimately update out-of-date sites for existing businesses, and help get small businesses off the ground, he added.
Some of the challenges for small businesses are evident in data released from the U.S. Small Business Administration. Ninety-seven percent of consumers use the web to search for products and services, but about half of all small businesses have websites, according to a January report.
The same report noted that of the businesses that created their own websites, 70% have no call to action, and about the same amount do not have email addresses listed online. Eighty-two percent don't include social media.