Some people who work for companies called brokerage firms give their opinions on whether a stock is a good buy or not. These opinions are called ratings. Investors like to know what these people think because they think they can make money from their advice. But sometimes, these people are not really telling the truth because they want to make more money by getting more people to buy the stock.
There is another way to know if a stock is a good buy or not, called the Zacks Rank. This is based on how much money a company is expected to make in the future. This is a better way to know if a stock is a good buy or not because it is not based on lying.
In the case of Wix.com, the brokerage ratings say it is a good buy, but the Zacks Rank says it is just okay. So, investors should not trust the brokerage ratings too much and should use the Zacks Rank instead.
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- The ABR is based on ratings from brokerage analysts, who have a vested interest in the stocks they cover and often show a positive bias in their recommendations.
- The Zacks Rank is a more reliable indicator, as it is based on earnings estimate revisions and is timely in predicting future stock prices.
- The ABR and Zacks Rank are different measures, and the former should not be confused with the latter.
- For Wix.com, the Zacks Rank is a Hold, suggesting caution.