Company Reports

We maintain our $115 fair value estimate for no-moat GoDaddy following a robust start to fiscal 2024. GoDaddy continues to enjoy a mix shift to higher margin solutions and has taken further action to drive operational efficiencies, including reducing headcount and leveraging AI in customer support. Following the result, we have tweaked our near-term assumptions to account for an improved full-year top-line growth outlook, but this is immaterial to our valuation. At current prices, GoDaddy shares continue to screen as fairly valued.

We think GoDaddy’s position as the world’s leading domain registrar creates a unique opportunity to capture demand from newly formed businesses and upsell complementary products beyond domain registration. We expect the one-stop-shop model will appeal to micro- and small businesses looking to establish and manage a ubiquitous online identity with integrated commerce solutions. The initial domain registration process is typically a customer's first interaction with GoDaddy, and acts as an onramp for additional products. For example, an entrepreneur seeking an online presence for their idea may approach GoDaddy for a domain registration initially, and as a natural extension purchase a subscription to a domain linked email account, website building tools and commerce solutions.

We think GoDaddy’s position as the world’s leading domain registrar creates a unique opportunity to capture demand from newly formed businesses and upsell complementary products beyond domain registration. We expect the one-stop-shop model will appeal to micro- and small businesses looking to establish and manage a ubiquitous online identity with integrated commerce solutions. The initial domain registration process is typically a customer's first interaction with GoDaddy, and acts as an onramp for additional products. For example, an entrepreneur seeking an online presence for their idea may approach GoDaddy for a domain registration initially, and as a natural extension purchase a subscription to a domain linked email account, website building tools and commerce solutions.

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.

We raise our fair value estimate for no-moat GoDaddy to $94 from $87 per share following strong third-quarter results that met our top-line expectations but exceeded our profitability assumptions. While aftermarket and hosting headwinds persisted into the third quarter, GoDaddy reported healthy bookings momentum, pointing to a recovery in top-line growth from fiscal 2024. In addition, GoDaddy is reaping benefits from headcount reductions, platform consolidation, and a cloud transition underpinning an impressive 250 basis points of sequential EBITDA margin improvement to 28%. While we expect GoDaddy will need to continue to invest in product functionality to remain competitive, we factor in structurally lower technology and development investment going forward, underpinning our improved valuation. Following a post-release rally, GoDaddy shares screen as fairly valued relative to our updated valuation, moving from 4-star to 3-star territory.

We think GoDaddy’s position as the world’s leading domain registrar creates a unique opportunity to capture demand from newly formed businesses and upsell complementary products beyond domain registration. We expect the one-stop-shop model will appeal to micro- and small businesses looking to establish and manage a ubiquitous online identity with integrated commerce solutions. The initial domain registration process is typically a customer's first interaction with GoDaddy, and acts as an onramp for additional products. For example, an entrepreneur seeking an online presence for their idea may approach GoDaddy for a domain registration initially, and as a natural extension purchase a subscription to a domain linked email account, website building tools and commerce solutions.

We maintain our $87 fair value estimate for no-moat GoDaddy following the release of mixed second-quarter fiscal 2023 results. Top-line growth fell marginally below our expectations as normalizing aftermarket demand, foreign-exchange headwinds, and a disposal of assets in the hosting business continued to drag on performance. Following the results, we have trimmed our near-term assumptions, but our longer-term forecasts and valuation remain intact. At current prices, GoDaddy shares trade at an attractive 17% discount to our unchanged fair value estimate.

We think GoDaddy’s position as the world’s leading domain registrar creates a unique opportunity to capture demand from newly formed businesses and upsell complementary products beyond domain registration. We expect the one-stop-shop model will appeal to micro- and small businesses looking to establish and manage a ubiquitous online identity with integrated commerce solutions. The initial domain registration process is typically a customer's first interaction with GoDaddy, and acts as an onramp for additional products. For example, an entrepreneur seeking an online presence for their idea may approach GoDaddy for a domain registration initially, and as a natural extension purchase a subscription to a domain linked email account, website building tools and commerce solutions.

We think GoDaddy’s position as the world’s leading domain registrar creates a unique opportunity to capture demand from newly formed businesses and upsell complementary products beyond domain registration. We expect the one-stop-shop model will appeal to micro- and small businesses looking to establish and manage a ubiquitous online identity with integrated commerce solutions. The initial domain registration process is typically a customer's first interaction with GoDaddy, and acts as an onramp for additional products. For example, an entrepreneur seeking an online presence for their idea may approach GoDaddy for a domain registration initially, and as a natural extension purchase a subscription to a domain linked email account, website building tools and commerce solutions.

We maintain our $87 fair value estimate for no-moat GoDaddy following a mixed first-quarter 2023 result. Topline growth fell short of our expectations as lumpy aftermarket revenue, foreign exchange headwinds, and a disposal of assets in the hosting business dragged on the result. Nonetheless, we are optimistic about a recovery over the course of the year as headwinds abate, and we maintain our full-year and long-term forecasts. At current prices, GoDaddy shares trade at an attractive 20% discount to our unchanged valuation.

No-moat GoDaddy reported sound fiscal 2022 results amid a cycling of pandemic era tailwinds and challenging global macroeconomic conditions. While our longer-term forecasts are largely unchanged, we raise our fair value estimate 5% to $87 primarily due to time value of money. We continue to expect soft economic conditions in the near term to accelerate small business attrition, and to weigh on demand for higher value solutions, before a bounce back in 2024.

We think GoDaddy’s position as the world’s leading domain registrar creates a unique opportunity to capture demand from newly formed businesses and upsell complementary products beyond domain registration. We expect the one-stop-shop model will appeal to micro- and small businesses looking to establish and manage a ubiquitous online identity with integrated commerce solutions. The initial domain registration process is typically a customer's first interaction with GoDaddy, and acts as an onramp for additional products. For example, an entrepreneur seeking an online presence for their idea may approach GoDaddy for a domain registration initially, and as a natural extension purchase a subscription to a domain linked email account, website building tools and commerce solutions.

No-moat GoDaddy reported a mixed third-quarter fiscal 2022 result as pandemic era digitization tailwinds continue to fade, and demand softens amid challenging macroeconomic conditions. Group revenue increased 7% year on year, or 9% in constant currency, aided by resilient client retention and higher average revenue per user due to incremental uptake of website design, email and commerce solutions. While GoDaddy has benefited from an increasingly diversified product suite and exposure to higher value clients, demand for new domain registration has tempered, reflecting a pull forward of demand during the pandemic, and now a reversal toward long-term normalized growth. Despite this, GoDaddy achieved year-over-year adjusted EBITDA margin expansion of 180 basis points to 25.4%, reflecting a mix shift to higher margin products and reduced marketing spend amid a softer demand environment.

No-moat GoDaddy delivered a reasonable second-quarter fiscal 2022 result as demand for online presence solutions continue to decelerate amid a further tapering of pandemic era digitization tailwinds, challenging macroeconomic conditions, and geopolitical unrest in Europe. Group revenue increased 10% year on year on a constant-currency basis, led by strong demand for website design software, email, and commerce solutions, and secondary market domain sales. GoDaddy’s increasingly diversified product suite away from core domain registration supported higher average revenue per user during the quarter. Adjusted EBITDA margin expanded an impressive 420 basis points to 25.4%, underpinned by mix shift to higher margin products and an easing of marketing investment amid a softer demand environment.

We think GoDaddy’s position as the world’s leading domain registrar creates a unique opportunity to capture demand from newly formed businesses and upsell complementary products beyond domain registration. We expect the one-stop-shop model will appeal to micro- and small businesses looking to establish and manage a ubiquitous online identity with integrated commerce solutions. The initial domain registration process is typically a customer's first interaction with GoDaddy, and acts as an onramp for additional products. For example, an entrepreneur seeking an online presence for their idea may approach GoDaddy for a domain registration initially, and as a natural extension purchase a subscription to a domain linked email account, website building tools and commerce solutions.

GoDaddy delivered a sound first-quarter fiscal 2022 result amid a tapering of pandemic-era digitization tailwinds, geopolitical unrest, and challenging macroeconomic conditions. Group revenue increased 11% year on year, which we believe comfortably outpaced domain registration growth, implying higher average product uptake per customer. This result was supported by strong demand for website design, email attachment, and aftermarket domain sales. Adjusted EBITDA margin expansion was ahead of our expectations, increasing an impressive 120 basis points to 22.5%. This was underpinned by leverage on marketing expenses and partly offset by continued investment in product innovation, return-to-office expenses, and inflationary pressures.

We think GoDaddy’s position as the world’s leading domain registrar creates a unique opportunity to capture demand from newly formed businesses and upsell complementary products beyond domain registration. We expect the one-stop-shop model will appeal to micro- and small businesses looking to establish and manage a ubiquitous online identity with integrated commerce solutions. The initial domain registration process is typically a customer's first interaction with GoDaddy, and acts as an onramp for additional products. For example, an entrepreneur seeking an online presence for their idea may approach GoDaddy for a domain registration initially, and as a natural extension purchase a subscription to a domain linked email account, website building tools and commerce solutions.

We are initiating coverage of GoDaddy with an $80 fair value estimate and no moat, stable moat trend, and high uncertainty ratings. While domain registration remains the company’s core offering, GoDaddy has expanded its business beyond domain registration to include a domain aftermarket platform, website design, security and hosting services, productivity tools such as email, and omni commerce solutions. This shift has included the 2021 acquisition of payment processing platform Poynt, which complements the company’s existing product suite and allows GoDaddy to compete more directly with providers such as narrow moat Block (owner of Square) and narrow moat Shopify.

We think GoDaddy’s position as the world’s leading domain registrar creates a unique opportunity to capture demand from newly formed businesses and upsell complementary products beyond domain registration. We expect the one-stop-shop model will appeal to micro- and small businesses looking to establish and manage a ubiquitous online identity with integrated commerce solutions. The initial domain registration process is typically a customer's first interaction with GoDaddy, and acts as an onramp for additional products. For example, an entrepreneur seeking an online presence for their idea may approach GoDaddy for a domain registration initially, and as a natural extension purchase a subscription to a domain linked email account, website building tools and commerce solutions.