GoDaddy (GDDY): Exploring Valuation as Airo Site Designer Launch Sparks Small Business Interest

GoDaddy (GDDY) just unveiled its latest AI-powered tool, the Airo Site Designer, and it's getting plenty of attention, especially from small business owners looking for a fast, no-hassle way to launch their online presence. This fresh launch isn’t just another product announcement. By focusing on making website building as simple as typing out your idea, GoDaddy is aiming straight at the biggest frustration for new entrepreneurs: getting up and running quickly without technical hurdles. It’s a move that signals GoDaddy is serious about keeping its competitive edge in the digital services space, particularly as more small businesses look to harness AI but lack confidence in where to begin.

This product rollout comes in the context of a mixed year for GoDaddy’s shares. While other tech stocks have enjoyed strong momentum, GoDaddy’s stock is down almost 9% over the past year and off nearly 29% since January, even with steady revenue and net income growth on the books. However, with nearly doubling returns over both three and five years, the long-term trend shows GoDaddy has delivered for patient investors. This year’s decline stands out against recent innovation pushes and industry optimism around digital solutions for small businesses.

With shares trading lower despite GoDaddy’s growth efforts and new AI-driven products, some investors may be weighing whether there is an opportunity for those who believe in the company’s direction, or if the market is already looking ahead and pricing in all the gains.

Most Popular Narrative: 26.6% Undervalued

The prevailing narrative sees GoDaddy’s current stock price as significantly undervalued in relation to future earnings potential, with market risks acknowledged but strong digital integration at the core of the story.

"Large-scale adoption of subscription-based SaaS and bundling initiatives, enabled by accelerated AI-driven product development, is shifting revenue mix toward recurring and higher-margin streams. This is improving revenue predictability and EBITDA margin expansion, targeting 33% by 2026."

What’s really fueling this optimistic scenario? The heart of this narrative is a bold thesis about GoDaddy’s recurring revenue play, ambitious margin targets, and powerful integration of next-gen product lines. The full narrative reveals the surprising pace of digital expansion and hints at major financial inflection points just ahead. Want to dig into the precise projections and the numbers powering this undervalued rating? Get ready because the details might reshape your view on GoDaddy’s true worth.

Result: Fair Value of $192.53 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, tough competition from integrated web platforms or persistent customer churn could still threaten GoDaddy’s long-term growth story and margin expansion.

Find out about the key risks to this GoDaddy narrative.

Another View: What Does Our DCF Model Say?

While analyst forecasts see upside based on future earnings, our SWS DCF model paints a similar picture and also suggests GoDaddy is undervalued. However, can two methods agree in a market this complex?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out GoDaddy for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own GoDaddy Narrative

If you’re the type who likes to dig beyond the headlines or put your own spin on the story, it’s fast and straightforward to build your own view. Take just minutes to get started. Do it your way

A great starting point for your GoDaddy research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.

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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.

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