On Wednesday, Wolfe Research adjusted its outlook on GoDaddy Inc (NYSE:GDDY), increasing the price target to $126 from the previous $122, while maintaining a Peer perform rating on the stock. The decision followed GoDaddy's fourth-quarter earnings report, which revealed bookings slightly below expectations by 2% and revenues that met analysts' forecasts. The company's EBITDA for the quarter exceeded projections by 2%, attributed to ongoing cost management efforts.
GoDaddy's initial outlook for 2024 presented a mixed picture, with revenue projections 1% below the midpoint of street estimates. This conservative forecast is partly due to ongoing optimizations within the company's core platforms. Despite this, GoDaddy anticipates a strong free cash flow (FCF) for the fiscal year 2024, expecting it to be at least $1.2 billion, marking an 11% year-over-year increase.
The company is experiencing positive developments in its commerce initiatives, particularly with the early indicators from Airo, its latest product offering. GoDaddy continues to prioritize improvements in margins and free cash flow. The market awaits further details on GoDaddy's product roadmap, financial targets, and plans for capital allocation, which are expected to be shared at the upcoming Investor Day on March 6th.
Following the earnings report, GoDaddy's shares saw a 1% decline in after-market trading, which contrasted with the flat performance of Nasdaq futures at the same time. Wolfe Research underscored the attractiveness of GoDaddy's valuation, citing a 10% free cash flow yield for the fiscal year 2025. The revised price target reflects the firm's recognition of the company's steady progress and potential for continued financial improvement.
InvestingPro Insights
GoDaddy Inc (NYSE:GDDY) has been catching the eye of investors and analysts alike with its recent financial performance and strategic initiatives. Wolfe Research's updated price target comes as GoDaddy shows signs of strong fundamental health, which is also reflected in the data from InvestingPro. The company's management has been actively buying back shares, indicating confidence in the company's future—a sentiment that may be shared by investors considering the stock's high shareholder yield and significant return over the last three months.
InvestingPro Data highlights GoDaddy's robust financial metrics, with a notable market capitalization of $15.55B USD and a solid P/E ratio (adjusted for the last twelve months as of Q4 2023) of 11.22. This low PEG ratio of 0.03 suggests that the company's earnings growth is not currently reflected in its price, potentially presenting an opportunity for investors. Despite trading at a high Price/Book multiple of 194.9, GoDaddy has shown a revenue growth of 3.98% over the last twelve months, indicating a steady increase in its top-line performance.
InvestingPro Tips further reveal that GoDaddy is trading near its 52-week high and has experienced a large price uptick over the last six months, demonstrating market optimism. Analysts predict the company will be profitable this year, a forecast supported by its profitability over the last twelve months. These insights are particularly relevant for investors looking for growth opportunities and stability in their portfolio selections.
For those interested in a deeper dive into GoDaddy's financials and future prospects, InvestingPro offers additional tips. To access these insights and make informed investment decisions, visit InvestingPro's GoDaddy page. Moreover, users can take advantage of a special offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
It's worth noting that GoDaddy does not pay dividends to shareholders, which may influence the investment strategies of those seeking regular income streams. However, the company's strong return over the last decade may appeal to growth-focused investors. With 13 additional InvestingPro Tips available, there's a wealth of information for those looking to get a comprehensive understanding of GoDaddy's market position and potential.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.