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GDDY

GoDaddy NYSE:GDDY Stock Report

Last Price

US$70.70

Market Cap

US$11.1b

7D

-6.3%

1Y

0.7%

Updated

27 Sep, 2022

Data

Company Financials +
GDDY fundamental analysis
Snowflake Score
Valuation4/6
Future Growth4/6
Past Performance4/6
Financial Health2/6
Dividends0/6

GDDY Stock Overview

GoDaddy Inc. engages in the design and development of cloud-based technology products in the United States and internationally.

GoDaddy Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for GoDaddy
Historical stock prices
Current Share PriceUS$70.70
52 Week HighUS$88.32
52 Week LowUS$64.81
Beta0.93
1 Month Change-9.04%
3 Month Change0.61%
1 Year Change0.68%
3 Year Change12.31%
5 Year Change62.04%
Change since IPO170.36%

Recent News & Updates

Aug 23
Does GoDaddy (NYSE:GDDY) Deserve A Spot On Your Watchlist?

Does GoDaddy (NYSE:GDDY) Deserve A Spot On Your Watchlist?

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks...

Jul 18

GoDaddy: Fierce Competition Could Make Its Future Difficult

GoDaddy Inc. is a cloud-based solution provider that assists people, corporations, and organizations in establishing an online presence, connecting with clients, and managing their endeavors. Many other web-hosting and domain providers have been gaining popularity in more recent years due to its functionality, such as Squarespace and Shopify. I believe that they are not safe for the increasing competition from other providers, due to its negative product reviews in contrast to the competitors. Furthermore, the price to gross profit valuation multiple of GoDaddy is almost equal to that of Wix and Squarespace, despite them having a much higher sales growth. For these reasons, I set my recommendation for GoDaddy at sell. Investment Thesis Due to its unfavorable product ratings in comparison to rivals, I believe that GoDaddy (GDDY) might struggle with the increasing competition. Furthermore, GoDaddy's price to gross profit value multiple is nearly equivalent to those of Wix and Squarespace, while they have substantially stronger sales growth. For these reasons, I am recommending a "sell" for GoDaddy. Introducing GoDaddy GoDaddy, Inc. is a cloud-based solution provider that assists people, corporations, and organizations in establishing an online presence, connecting with clients, and managing their endeavors. The company offers apps as well as access to third-party products and platforms. It provides a number of solutions, including domains, hosting and presence, business apps, and integrated commerce. Registrations, Aftermarket, and Domain Name Add-Ons are among its domain products. Shared Website Hosting, Website Hosting on Virtual Private Servers and Virtual Dedicated Servers, Managed Hosting, and Security. Websites + Marketing, Marketing, and Social Media Management are among its presence offerings. According to its latest annual report, revenue in 2021 was generated by: Domains, 47% Hosting and Presence, 34% Business applications, 19% (primarily from third-party productivity applications) Historical Performance Growth rates (Year-over-year) Index 2019 2020 2021 Last 4 Quarters Revenue 12% 10% 15% 14% Gross Profit 11% 10% 13% 12% Source: Seeking Alpha Margins (% of revenue) Index 2019 2020 2021 Last 4 Quarters Gross Profit 65% 65% 64% 63% Selling, General & Admin 23% 22% 22% 21% Research & Development 16% 16% 18% 18% Net Income 4% -14% 6% 7% Free Cash Flow Margin 21% 21% 20% 20% Source: Seeking Alpha According to its latest annual report, the 15% percent rise in total revenue was driven by 2.8% growth in total customers, 9.7% growth in ARPU (Average Revenue Per Unit/User), and increased revenue from acquisitions. The 2.8% growth in total customers seems to be rather low, which I will get more in-depth about further along in this article. Its net income margin is relatively low, but positive and improving. Market Outlook The COVID-pandemic had a significant impact on the hosting and web hosting market. E-commerce sales grew by $244.2 billion, or 43 percent, in 2020, the first year of the pandemic, climbing from $571.2 billion in 2019 to $815.4 billion in 2020, according to the most current 2020 ARTS report. Furthermore, individual consumers spent significantly more time at home. As a result, existing web services saw a significant increase in traffic. Moreover, the time at home allowed entrepreneurs to work on online ideas more. According to a Fortune Business Insight report, the global market for web hosting services is estimated to have reached a whopping USD 83.99 billion in 2021. I do expect the web hosting market to significantly grow in the long-term as well, due to trends such as increasing internet and e-commerce use worldwide, increasing required features of web hosting packages, and increasing the online presence of companies. However, I do think, in the short term, it might be difficult to sustain the growth rates seen during the COVID pandemic, as the same causes mentioned for increased revenue during the pandemic might stagnate or even reverse post-COVID for a bit. Competition and Product Review As the "online presence" market is a large one with very high growth rates, competition is intense and getting increasingly more intense as new entrants try to grab their share of the market. Several companies' players are • Domain registration services and web-hosting solutions from Donuts, United Internet, Namecheap, WPEngine, Bluehost, and Hostgator; • Website creation and management solutions from Shopify (SHOP), Squarespace (SQSP), and Wix (WIX); A domain registrar comparison shows GoDaddy is the absolute dominant leader when it comes to the domain registration industry: Domain Registrar Stats (domainstate.com) I believe that part of the reason why it's such a dominant player is its successful marketing through its many Superbowl ads between 2005 and 2015. Nonetheless, a large user base doesn't have to correlate with the quality of the products offered. I believe that GoDaddy services are rated very negatively by Reddit users (Source 1, Source 2). The arguments mentioned are bad service, slow loading times, lack of complexity, and high prices. The same sources mention other services providing better functionality and support for a cheaper price, such as Squarespace, Shopify, and Wix.

Shareholder Returns

GDDYUS ITUS Market
7D-6.3%-6.9%-5.8%
1Y0.7%-38.0%-22.1%

Return vs Industry: GDDY exceeded the US IT industry which returned -39.7% over the past year.

Return vs Market: GDDY exceeded the US Market which returned -23.7% over the past year.

Price Volatility

Is GDDY's price volatile compared to industry and market?
GDDY volatility
GDDY Average Weekly Movement4.2%
IT Industry Average Movement8.0%
Market Average Movement6.9%
10% most volatile stocks in US Market15.7%
10% least volatile stocks in US Market2.8%

Stable Share Price: GDDY is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: GDDY's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
20146,611Aman Bhutanihttps://www.godaddy.com

GoDaddy Inc. engages in the design and development of cloud-based technology products in the United States and internationally. The company provides domain name registration product that enables to engage customers at the initial stage of establishing a digital identity. It also offers shared Website hosting products that provide various applications and products, such as web analytics, Secure Sockets Layer certificates, and WordPress; Website hosting on virtual private servers and virtual dedicated servers products, which allows customers to select the server configuration suited for their applications, requirements, and growth; managed hosting products to set up, monitor, maintain, secure, and patch software and servers for customers; and security products, a suite of tools designed to help secure customers' online presence.

GoDaddy Inc. Fundamentals Summary

How do GoDaddy's earnings and revenue compare to its market cap?
GDDY fundamental statistics
Market CapUS$11.08b
Earnings (TTM)US$343.50m
Revenue (TTM)US$4.00b

32.2x

P/E Ratio

2.8x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
GDDY income statement (TTM)
RevenueUS$4.00b
Cost of RevenueUS$1.45b
Gross ProfitUS$2.55b
Other ExpensesUS$2.21b
EarningsUS$343.50m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)2.20
Gross Margin63.77%
Net Profit Margin8.58%
Debt/Equity Ratio-870.1%

How did GDDY perform over the long term?

See historical performance and comparison