Shares in domain name giant GoDaddy (GDDY) dropped today after private equity giant CVC was reported to be eyeing up a bid for its rival Namecheap.
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Closing In
According to an article in the Wall Street Journal, CVC is closing in on buying a majority stake in Namecheap. That would value the domain registrar and web-hosting provider at about $1.5 billion including debt.
It is understood that if the deal goes ahead then CVC will work closely with Namecheap’s founder and chief executive officer Richard Kirkendall.
Established about 25 years ago, Arizona-based Namecheap started out registering web domain names. Its offerings have expanded to include online hosting and security services to help users develop and manage websites.
Its customers include recently listed Figma (FIG), the web design platform and Buffer, a provider of social-media marketing tools.
It is understood that Namecheap’s revenues rose 18% in 2024 to $398 million.
Dropping Daddy
GoDaddy is one of the company’s main rivals, and as such extra financial backing for Namecheap could be another drag on its performance and faltering share price – see below:
The GoDaddy stock has dropped 25% this year. The drop in share price came primarily in two large steps, one in February, when the company missed expectations in its 4Q 24 earnings report, and again when the 2Q25 report showed a beat vs. the profit forecast – but by less than investors had hoped.
Its challenges include no longer operating as the registry service provider for the .co top-level domain. As such, it expects a negative impact on bookings and revenue primarily in the fourth quarter.
The total customer count has also continued to face pressure from migrations and low-cost domain renewals.
However, it sees hope for the future in offering advanced AI capabilities to a substantial portion of its customer base.
Is GDDY a Good Stock to Buy Now?
On TipRanks, GDDY has a Moderate Buy consensus based on 12 Buy and 5 Hold ratings. Its highest price target is $250. GDDY stock’s consensus price target is $196, implying a 33.50% upside.
