Why GoDaddy (GDDY) is on investors’ radar today

GoDaddy (GDDY) has come into focus after a recent stretch of negative returns, with the stock down over the past week, month, and past 3 months, prompting closer attention to its underlying business performance.

At a last close of US$104.46, the company sits against a backdrop of reported annual revenue of US$4.87b and net income of US$828.5m. This offers investors a snapshot of its current scale in cloud-based applications and core domain services.

That recent 16.8% 30 day share price decline and 11.9% year to date share price decline contrast with a 30.5% three year total shareholder return. This suggests momentum has cooled after a stronger multi year run as investors reassess growth and risk.

If GoDaddy has you thinking about where the next opportunities might be, this could be a good moment to broaden your search with high growth tech and AI stocks.

So with recent share price declines sitting against annual revenue of US$4.87b and net income of US$828.5m, is GoDaddy quietly trading at a discount, or is the market already pricing in whatever growth comes next?

Most Popular Narrative: 40.3% Undervalued

Against a last close of US$104.46, the most followed narrative places GoDaddy’s fair value meaningfully higher, built on detailed revenue, margin and cash flow assumptions.

The analysts have a consensus price target of $192.529 for GoDaddy based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $250.0, and the most bearish reporting a price target of just $150.0.

Curious what kind of revenue path, margin lift and earnings multiple are baked into that fair value, and how a 9.66% discount rate ties it together? The full narrative spells out the growth runway, profit profile and valuation bridge that have to line up for this number to hold.

Result: Fair Value of $175.06 (UNDERVALUED)

However, these assumptions could be challenged if competition from all-in-one platforms eats into GoDaddy’s domain and hosting base, or if churn remains stubbornly high.

Build Your Own GoDaddy Narrative

If you see the numbers differently or simply prefer to test your own assumptions, you can create a GoDaddy narrative in a few minutes with Do it your way.

A great starting point for your GoDaddy research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If GoDaddy has sharpened your appetite for opportunities, do not stop here. Cast a wider net now so you are not left watching others act first.

• Tap into potential mispricings by scanning these 863 undervalued stocks based on cash flows that might offer more attractive entry points based on their cash flow characteristics.
• Ride major tech trends by checking out these 24 AI penny stocks that could benefit from expanding use cases in artificial intelligence.
• Stay ahead of disruption by reviewing these 80 cryptocurrency and blockchain stocks linked to blockchain, tokenization and digital payment infrastructure.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.