Website hosting services provider GoDaddy (NYSE:GDDY) is on the end of a positive market rush as investors troop in following its impressive third-quarter report. At the same time, Wall Street analysts had very nice things to say about the company.
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Indeed, Matthew Pfau, an analyst at Investment firm William Blair, told clients that GoDaddy’s margin expansion should turn out as expected. Pfau, who has an Outperform rating on the company, expects the stock to rise significantly in the near term. However, the analyst said this will only happen if investors gain confidence in the company’s ability to do this.
Along the same lines, investment firm Citi applauded the company’s EBITDA margins and ability to utilize its investments to increase free cash flow. Following the results, Citi raised its price target on the stock to $95 from $86.
At investment bank Evercore ISI, analyst Mark Mahaney, while applauding GoDaddy for its Q3 performance, said the company’s margin boost was driven primarily by cost reduction in its Tech and Dev division. Mahaney, who also has an Outperform rating on GDDY, noted that the cost reduction is largely structural.
On Thursday, GoDaddy reported Q3 earnings of $0.89 and revenue of $1.07 billion, which beat analysts’ expectations and inspired its recent upward trend. So far, the stock is up over 14% this year, with most of its gains coming in the past five days.
Is GoDaddy a Good Stock to Buy Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on GDDY stock based on three Buys and two Holds assigned in the past three months, as indicated by the graphic below. Furthermore, the average GDDY stock price target of $94.50 per share implies 11.86% upside potential.
