GoDaddy (GDDY) AI Stock Analysis

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GoDaddy

(NYSE:GDDY)

66Neutral

GoDaddy's overall stock score reflects its solid financial performance, highlighted by strong revenue and profit growth and robust cash flow generation. However, the high debt levels and weak technical indicators suggest caution. The earnings call provided optimism with key growth initiatives like Aero, but challenges such as a declining customer base and slow core platform growth temper enthusiasm. The valuation is reasonable, though the lack of a dividend yield may limit appeal for income investors.

Positive Factors

Financial Performance

GoDaddy outperformed on the profitability front with adjusted EBITDA margin over 120 basis points ahead of prior guidance and unlevered free cash flow margin 220 basis points ahead of the Street.

Growth Opportunities

Airo Plus directly monetizing AI capabilities is viewed as an upside to GoDaddy's financial model.

Product Innovations

GoDaddy's product innovations, such as converting a URL into a website, are expected to increase ease of use, engagement, and conversion.

Negative Factors

Mixed Guidance

Despite the solid growth drivers heading into 2025, GoDaddy provided mixed initial guidance for the year with profitability guidance likely disappointing investor expectations.

Profitability Guidance

The profitability guidance likely disappointed investor expectations as the margin expansion cadence is slowing this year to about 100 basis points, down from nearly 400 basis points the previous year.

Revenue Growth Guidance

FY25 revenue growth guidance at +7% likely fell short of expectations following strong share performance.

GoDaddy (GDDY) vs. S&P 500 (SPY)

Market Cap

$24.61B

Dividend YieldN/A

Average Volume (3M)1.79M

Price to Earnings (P/E)26.2

Beta (1Y)1.22

Revenue Growth7.82%

EPS Growth-32.24%

CountryUS

Employees5,518

SectorTechnology

Sector Strength49

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)6.45

Shares Outstanding141,355,910

10 Day Avg. Volume1,894,087

30 Day Avg. Volume1,791,673

Financial Highlights & Ratios

PEG Ratio0.04

Price to Book (P/B)N/A

Price to Sales (P/S)5.57

Price to Cash Flow (P/CF)18.70

P/FCF Ratio19.50

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$221.29

Price Target Upside28.66% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering15

GoDaddy Business Overview & Revenue Model

Company DescriptionGoDaddy Inc. (GDDY) is a leading technology company that specializes in internet domain registration and web hosting services. Founded in 1997, the company empowers individuals and businesses to establish their online presence. GoDaddy offers a comprehensive suite of products, including domain names, website building tools, hosting services, email hosting, online marketing tools, and security solutions, serving millions of customers worldwide.

How the Company Makes MoneyGoDaddy generates revenue through various streams primarily originating from its domain registration and web hosting services. The company charges fees for registering and renewing domain names, which is a significant part of its income. Additionally, GoDaddy earns money by providing website hosting and management services, which include shared hosting, virtual private servers, and dedicated server options. The company also monetizes its website building tools and online marketing services, such as email marketing and search engine optimization. Furthermore, GoDaddy offers business applications and professional services, like website design and security solutions, which contribute to its earnings. Key partnerships with technology and service providers enhance its product offerings, driving additional sales and customer retention.

GoDaddy Financial Statement Overview

Summary

GoDaddy demonstrates strong revenue and profit growth, with effective cost management and operational efficiency. The company has improved its balance sheet with a return to positive equity, though high leverage poses potential risks. Strong cash flow metrics bolster its financial position, but caution is advised due to the high debt levels.

Income Statement

Very Positive

GoDaddy has shown consistent revenue growth with a 7.51% increase from 2023 to 2024. The gross profit margin stood at 63.88%, highlighting efficient cost management. The net profit margin improved to 20.48%, reflecting strong profitability. EBIT and EBITDA margins were 19.54% and 23.36% respectively, indicating robust operational performance. However, the net income decreased compared to 2023, which slightly impacts the overall score.

Balance Sheet

Positive

The debt-to-equity ratio remains high due to substantial leverage, which can be risky. The company has improved its equity position with a return to positive stockholders' equity. The return on equity (ROE) is remarkably high at 135.37%, driven by improved net income. The equity ratio is 8.40%, suggesting low equity relative to assets, which could be a risk if liabilities increase.

Cash Flow

Positive

Free cash flow grew by 30.01% from 2023 to 2024, demonstrating strong cash generation capabilities. The operating cash flow to net income ratio is 1.37, indicating efficient cash flow management. The free cash flow to net income ratio is 1.35, showing that the company is generating significant cash relative to its net income. Despite the positive cash flow metrics, high leverage remains a concern.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
4.57B	4.25B	4.09B	3.82B	3.32B
	Gross Profit
2.92B	2.68B	2.61B	2.44B	2.16B
	EBIT
893.50M	547.40M	498.80M	382.10M	-358.90M
	EBITDA
1.07B	821.60M	744.20M	659.60M	-198.10M
	Net Income Common Stockholders
936.90M	1.37B	352.20M	242.30M	-494.10M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.09B	498.80M	774.00M	1.26B	765.20M
	Total Assets
8.24B	7.56B	6.97B	7.42B	6.43B
	Total Debt
3.87B	3.94B	3.95B	4.03B	3.28B
	Net Debt
2.78B	3.48B	3.17B	2.77B	2.52B
	Total Liabilities
7.54B	7.50B	7.30B	7.33B	6.44B
	Stockholders Equity
692.10M	62.20M	-331.80M	81.70M	-12.90M
Cash Flow		Free Cash Flow
1.26B	970.20M	919.60M	576.10M	683.10M
	Operating Cash Flow
1.29B	1.05B	979.70M	829.30M	764.60M
	Investing Cash Flow
21.50M	-102.40M	-132.00M	-635.60M	-482.30M
	Financing Cash Flow
-677.40M	-1.26B	-1.33B	298.10M	-581.70M

GoDaddy Technical Analysis

Technical Analysis Sentiment

Negative

Last Price172.00

Price Trends

50DMA

183.21

Negative

100DMA

192.29

Negative

200DMA

174.53

Negative

Market Momentum

MACD

-1.09

Negative

RSI

48.09

Neutral

STOCH

41.40

Neutral

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 172 is below the 20-day moving average (MA) of 176.82, below the 50-day MA of 183.21, and below the 200-day MA of 174.53, indicating a bearish trend. The MACD of -1.09 indicates Negative momentum. The RSI at 48.09 is Neutral, neither overbought nor oversold. The STOCH value of 41.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GDDY.

GoDaddy Risk Analysis

GoDaddy disclosed 61 risk factors in its most recent earnings report. GoDaddy reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

GoDaddy Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TOST	73 Outperform	$19.77B	―	1.46%	―	28.33%	―
OKTA	69 Neutral	$17.66B	1,734.30	0.46%	―	15.33%	―
VRSN	68 Neutral	$23.14B	30.35	-72.04%	―	4.31%	1.07%
DBX	68 Neutral	$8.38B	19.32	-60.11%	―	1.86%	6.21%
GDDY	66 Neutral	$24.61B	26.19	248.42%	―	7.82%	-32.24%
WIX	63 Neutral	$9.18B	66.95	-46.79%	―	12.74%	327.43%
Sector *	57 Neutral	$19.52B	9.58	-12.47%	2.79%	5.43%	-24.71%

* Technology Sector Average

Performance Comparison

GDDY

GoDaddy

172.00

48.70

39.50%

VRSN

Verisign

247.13

61.70

33.27%

WIX

Wix

158.50

31.36

24.67%

OKTA

Okta

101.82

3.56

3.62%

DBX

Dropbox

27.08

4.09

17.79%

TOST

Toast Inc

34.08

10.26

43.07%

GoDaddy Earnings Call Summary

Earnings Call Date: Feb 13, 2025 | % Change Since: -19.07% | Next Earnings Date: May 1, 2025

Earnings Call Sentiment Positive

The earnings call highlighted GoDaddy's significant achievements in financial performance, particularly in the applications and commerce segment, and the successful launch and growth of Aero. However, challenges such as a decline in the customer base and slow growth in the core platform segment were noted. The company is optimistic about future growth, particularly with its Aero initiative and strategic focus on high-value customers.

Highlights

Record Annual Bookings

GoDaddy crossed a significant milestone by delivering its first $5 billion of annual bookings in 2024, driving top-line bookings growth of over 9%.

Strong Financial Performance

Annual revenue grew 8% to $4.6 billion, with applications and commerce revenue increasing by 16% to $1.7 billion. Normalized EBITDA margin expanded to 31%, up nearly 400 basis points.

Commerce Growth and Innovation

Annualized gross payment volume increased 55% to $2.6 billion, with new innovations like GoDaddy Capital being introduced to support customer cash flow management.

Successful Aero Initiative

Aero has shown promising results with 50% of paid subscriptions originating with the Aero experience. AeroPlus was also launched with advanced features, and Aero-related marketing efforts during the Super Bowl increased visibility.

Applications and Commerce Segment Surge

Applications and commerce bookings grew 21%, contributing to a 25% increase in free cash flow for the year.

Lowlights

Customer Base Decline

Customer base declined to 20.5 million due to divestitures, ending deep discounting, and migrations. Although newer cohorts are delivering as intended, the overall company retention rate slightly dipped to 84%.

Core Platform Segment Slow Growth

Core platform revenue grew only by 3% to $2.9 billion, with bookings growth of 4%, slightly tempered by strategic initiatives and divestitures.

Currency Headwinds

Currency headwinds are expected to impact revenue growth, particularly affecting international growth compared to the US.

Company Guidance

During the call, GoDaddy provided guidance for 2025 with several key metrics. The company is targeting total revenue growth of 7% at the midpoint, aiming for $4.86 to $4.94 billion. The Applications and Commerce (A&C) segment is expected to see mid-teens revenue growth, while the Core Platform segment will grow at low single digits. They also anticipate a normalized EBITDA margin expansion of about 100 basis points, targeting a 33% margin by 2026. Free cash flow is expected to exceed $1.5 billion, representing over 11% growth. Additionally, GoDaddy plans capital expenditures of $30 million, cash interest payments of $150 million, and $30 million in cash taxes. The company maintains a disciplined capital allocation approach, focusing on shareholder returns.

GoDaddy Corporate Events

Executive/Board Changes

GoDaddy Appoints New Chief Accounting Officer

Neutral

Nov 8, 2024

GoDaddy Inc. has announced a leadership change in its accounting department, appointing Phontip Palitwanon as the new Chief Accounting Officer following the restructuring that impacted Nicholas Daddario’s role. Ms. Palitwanon, with nine years at the company, steps into her new role with a compensation package that includes a base salary of $350,000, a potential annual bonus, and significant equity awards. Her appointment reflects GoDaddy’s strategic moves to strengthen its financial leadership.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.