GoDaddy stock has had a difficult year, with a steep share price decline sitting alongside valuation checks that still lean on the cheap side rather than pointing to an obvious overpricing.

• GoDaddy shares are down 46.5% over the past year, which puts recent returns firmly in the loss column for existing holders.
• The launch of the GoDaddy Developer Platform, which aims to embed domain management directly into developer and AI workflows, can support revenue opportunities over time. However, execution risk around adoption and monetisation may limit how much investors are willing to pay for that potential.
• On Simply Wall St's broader checks, GoDaddy screens as undervalued in 5 of 6 areas. This suggests the valuation metrics lean cheap rather than expensive overall, as shown by its value score of 5.

The issue now is whether the current share price around US$89.40 already reflects GoDaddy's risks and opportunities, or if the stock still offers a margin of safety for new money.

Is GoDaddy a Bargain on Earnings?

The P/E ratio suits GoDaddy because earnings are a key driver of how investors value a recurring, subscription-heavy software business. On this measure, GoDaddy trades on a P/E of about 13.6x, which sits below both the IT industry average of 17.4x and a much higher peer average of 39.1x. That already places the stock at a discount to many similar companies based on current earnings.

A more tailored benchmark, which looks at GoDaddy’s growth profile, margins, size and risks, suggests a fair P/E of about 27.2x. Against that yardstick, the current multiple is materially lower, indicating the market is paying less for each dollar of GoDaddy earnings than this framework would indicate. Despite interest in the new GoDaddy Developer Platform and its AI-focused positioning, the earnings multiple still sits well below both peers and the modelled fair level.

Overall, GoDaddy stock appears undervalued on its P/E multiple relative to both industry norms and the more tailored fair ratio.

The GoDaddy Narrative: What Would Justify Today's Price?

Simply Wall St Narratives for GoDaddy pick up where this valuation puzzle leaves off. They spell out which combinations of future growth, margins and earnings would need to play out for the stock to be worth materially more or less than today, and set each view against a specific path for GoDaddy's growth, profitability and risk profile that you can revisit as new information comes through on the Community page.

Community narratives around GoDaddy sit far apart, with one group seeing substantial upside tied to AI and margins while another leans into competitive and legal risks.

Bull case: 49% undervalued

"The unprecedented scale and automation achievable through Agentic AI, from customer onboarding to ongoing SEO and marketing optimization, will allow GoDaddy to deliver enterprise-grade services to SMBs at mass-market economics, potentially leading to step changes in average revenue per user and retention metrics..."

Bear case: 8% overvalued

"Although GoDaddy is well-positioned to capitalize on the accelerating digital transformation of businesses and the proliferation of small businesses globally, the company faces increasing competitive pressure from bundled web presence solutions offered by large cloud providers, which could limit new customer acquisition and compress average revenue per user in the long run, impacting top-line revenue growth..."

Do you think there's more to the story for GoDaddy? Head over to our Community to see what others are saying!

The Bottom Line

For GoDaddy, the core question is whether the current discount on earnings is compensation for real competitive and execution risks, or a mispricing that could close if sentiment improves. The stock appears undervalued on its P/E multiple and broader checks, but that only helps if the company can turn its developer and AI ambitions into durable earnings without eroding margins. What matters most from here is whether GoDaddy can defend and grow its revenue per user in the face of bundled rivals, which will determine whether today’s discount becomes an opportunity or proves to be a value trap.

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.