GoDaddy (GDDY) AI Stock Analysis

• Market Cap: $15.34B
• Dividend Yield: N/A
• Average Volume (3M): 1.27M
• Price to Earnings (P/E): 19.3
• Beta (1Y): 0.81
• Revenue Growth: 8.79%
• EPS Growth: -55.15%
• Country: US
• Employees: 5,518
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 1.51
• Shares Outstanding: 135,141,600
• 10 Day Avg. Volume: 1,024,562
• 30 Day Avg. Volume: 1,268,311
• PEG Ratio: -1.04
• Price to Book (P/B): 40.28
• Price to Sales (P/S): 6.10
• P/FCF Ratio: 22.11
• Enterprise Value/Market Cap: 1.43
• Enterprise Value/Revenue: 4.51
• Enterprise Value/Gross Profit: 7.34
• Enterprise Value/Ebitda: 17.92
• 1Y Price Target: $166.38
• Price Target Upside: 48.24% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 60 Neutral
• Price Target: $119.00 ▲(6.02% Upside)

GoDaddy's overall stock score is driven by strong earnings call results and solid profitability, despite challenges in revenue growth and technical indicators suggesting bearish momentum. The company's strategic focus on AI and customer engagement provides a positive outlook, but financial stability concerns and valuation limit the score.

Positive Factors

AI and Product Innovation

GoDaddy's investment in AI and product innovation enhances its service offerings, potentially increasing customer satisfaction and retention, which can drive long-term growth.

Customer Engagement and Growth

The growth in high-intent customers and ARPU indicates strong customer engagement, which can lead to sustained revenue growth and improved profitability.

International Revenue Growth

Strong international revenue growth suggests successful market expansion and diversification, reducing reliance on domestic markets and enhancing long-term stability.

Negative Factors

Gross Margin Pressure

Persistent gross margin pressure could impact profitability, as increased costs from AI investments may not be immediately offset by revenue gains.

Revenue Growth Decline

A decline in revenue growth can signal market saturation or increased competition, potentially affecting long-term financial performance and market position.

Financial Stability Concerns

Financial instability, indicated by a high debt-to-equity ratio, can limit GoDaddy's ability to invest in growth opportunities and weather economic downturns.

GoDaddy Business Overview & Revenue Model

Company Description

GoDaddy Inc. engages in the design and development of cloud-based technology products in the United States and internationally. The company provides domain name registration product that enables to engage customers at the initial stage of establishing a digital identity. It also offers shared Website hosting products that provide various applications and products, such as web analytics, Secure Sockets Layer certificates, and WordPress; Website hosting on virtual private servers and virtual dedicated servers products, which allows customers to select the server configuration suited for their applications, requirements, and growth; managed hosting products to set up, monitor, maintain, secure, and patch software and servers for customers; and security products, a suite of tools designed to help secure customers' online presence. In addition, the company provides presence products, such as Websites + Marketing, a do-it-yourself mobile-optimized online tool that enables customers to build websites and e-commerce enabled online stores; a range of marketing tools and services designed to help businesses acquire and engage customers, and create content, as well as search engine optimization that helps customers get their websites found on search sites; and social media management services. Further, it offers business application products, such as Microsoft Office 365, email accounts, email marketing, and Internet-based telephony services; online store capabilities that allows customers to transact business directly on their websites; GoDaddy Payments, a payment facilitator; and point-of-sale (POS) devices, as well as software for POS. The company serves small businesses, individuals, organizations, developers, designers, and domain investors. GoDaddy Inc. was incorporated in 2014 and is headquartered in Tempe, Arizona.

How the Company Makes Money

GoDaddy generates revenue primarily through its domain registration services, web hosting subscriptions, and additional products such as website builders and online marketing tools. The company's revenue model includes both one-time transaction fees for domain registrations and recurring subscription fees for hosting and premium services. Key revenue streams include domain name registrations, which account for a significant portion of its income, as well as hosting services that provide users with the infrastructure to run their websites. Additionally, GoDaddy offers value-added services like email hosting, SSL certificates, and e-commerce solutions, which contribute to its diversified revenue base. The company has also formed strategic partnerships with various technology providers to enhance its service offerings and reach, further driving its earnings potential.

GoDaddy Financial Statement Overview

Summary

GoDaddy shows strong profitability and operational efficiency with healthy margins and cash flow ratios. However, the significant decline in revenue and free cash flow growth poses a risk. Improved leverage position is a positive, but the balance sheet still reflects potential financial instability.

Income Statement

GoDaddy's income statement shows a mixed performance. The TTM data indicates a significant decline in revenue growth rate at -24.12%, which is concerning. However, the company maintains healthy margins with a gross profit margin of 63.81% and a net profit margin of 17.15% in the TTM. The EBIT and EBITDA margins are also strong, indicating operational efficiency. Despite the revenue decline, profitability remains robust.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 0.88 in the TTM, which is a significant improvement from previous years but still indicates leverage risk. The return on equity is strong at 1.91%, showing effective use of equity. However, the equity ratio is low, suggesting potential financial instability if not managed carefully.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth at -77.48% in the TTM, which is a concern. However, the operating cash flow to net income ratio is strong at 112.29%, indicating good cash generation relative to net income. The free cash flow to net income ratio is also healthy at 0.96, suggesting efficient cash management despite the growth decline.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.87B	4.57B	4.25B	4.09B	3.82B	3.32B
Gross Profit	3.00B	2.92B	2.68B	2.61B	2.44B	2.16B
EBITDA	1.23B	1.06B	754.10M	697.40M	579.20M	-201.40M
Net Income	828.50M	936.90M	1.37B	352.20M	242.30M	-495.10M
Balance Sheet
Total Assets	7.98B	8.24B	7.56B	6.97B	7.42B	6.43B
Cash, Cash Equivalents and Short-Term Investments	923.70M	1.09B	498.80M	774.00M	1.26B	765.20M
Total Debt	3.87B	3.89B	3.94B	3.98B	4.06B	3.32B
Total Liabilities	7.89B	7.54B	7.50B	7.30B	7.33B	6.44B
Stockholders Equity	91.80M	692.10M	62.20M	-331.80M	81.70M	-12.90M
Cash Flow
Free Cash Flow	1.54B	1.26B	970.20M	919.60M	576.10M	683.10M
Operating Cash Flow	1.57B	1.29B	1.05B	979.70M	829.30M	764.60M
Investing Cash Flow	-33.60M	21.50M	-102.40M	-132.00M	-635.60M	-482.30M
Financing Cash Flow	-1.38B	-677.40M	-1.26B	-1.33B	298.10M	-581.70M

GoDaddy Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 112.24
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GDDY, the sentiment is Negative. The current price of 112.24 is below the 20-day moving average (MA) of 121.84, below the 50-day MA of 126.10, and below the 200-day MA of 152.71, indicating a bearish trend. The MACD of -4.01 indicates Positive momentum. The RSI at 18.74 is Positive, neither overbought nor oversold. The STOCH value of 3.15 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GDDY.

GoDaddy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FFIV	74 Outperform	$15.64B	22.92	20.60%	―	9.66%	23.87%
WEX	73 Outperform	$5.55B	20.89	20.30%	―	-1.15%	-2.52%
WIX	63 Neutral	$5.26B	39.88	―	―	13.22%	48.20%
DBX	62 Neutral	$6.83B	15.49	―	―	-0.44%	2.47%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
GDDY	60 Neutral	$15.34B	19.34	369.45%	―	8.79%	-55.15%
ZS	60 Neutral	$34.56B	-825.57	-2.41%	―	23.24%	-8.83%