GoDaddy Earnings: Profitability Upside on Product Mix Shift and Platform Consolidation

We raise our fair value estimate for no-moat GoDaddy to $115 per share from $94 following the release of strong fourth-quarter and fiscal 2023 results, which met our top-line forecasts but exceeded our profitability expectations. GoDaddy continues to enjoy a mix shift to higher-margin solutions and has driven operational efficiencies by shifting customer support to digital channels, moving employee headcount to lower-cost regions, and reducing technology spending through platform consolidation. We believe these measures will support structurally higher midcycle margins relative to our prior forecast, underpinning our improved valuation. At current prices, GoDaddy shares trade in line with our updated fair value estimate.