GoDaddy shares target raised by Benchmark By Investing.com

Benchmark, a financial analyst firm, updated its outlook on GoDaddy Inc (NYSE:), raising the price target on the company’s shares to $186 from the previous $170 while maintaining a Buy rating. The adjustment reflects a valuation set at 19.5 times the estimated 2025 Enterprise Value to Free Cash Flow (EV/FCF), which is a 25% increase over the average EV/FCF multiple from 2020 to 2022.

The revision follows a virtual Non-Deal Roadshow (NDR) with GoDaddy’s Chief Financial Officer, Mark McCaffrey, which took place last week. During this event, several key insights were shared that added to the information provided in GoDaddy’s second-quarter financial report.

Benchmark’s updated price target is influenced by GoDaddy’s Free Cash Flow per Share (FCF/share) Compound Annual Growth Rate (CAGR) target for the years 2024 to 2026.

The analyst from Benchmark highlighted that the new price target is aligned with GoDaddy’s growth trajectory and financial targets. The firm’s stance remains positive on the stock, as indicated by the reiterated Buy rating.

GoDaddy, a leading internet domain registrar and web hosting company, has been under the scrutiny of investors and analysts alike, as its financial performance and strategic initiatives influence its market valuation and stock performance.

GoDaddy Inc. reported robust Q2 earnings, with a 7% increase in total revenue to $1.1 billion. The Applications and Commerce segment saw a 15% growth, contributing to the company’s upwardly revised full-year revenue guidance. RBC Capital Markets has responded to this strong performance by raising its price target for GoDaddy from $145 to $175 while maintaining an Outperform rating on the shares.

The firm highlighted GoDaddy’s Apps & Commerce segment, which accelerated bookings by 24%, aligning with industry peers. This growth is significant as it contributes to both margin improvement and multiple expansion for the company.

Despite a net debt of $3.4 billion, GoDaddy remains optimistic about its AI initiatives, including GoDaddy Airo and GABI, a customer service tool. These developments reflect the company’s ongoing commitment to innovation, global expansion, and delivering value to its shareholders.

InvestingPro Insights

GoDaddy Inc (NYSE:GDDY) has been showing strong performance metrics that align well with the confidence expressed by Benchmark in their latest price target update. Notably, GoDaddy’s market capitalization stands at an impressive $22.9 billion, underlining the company’s substantial presence in the market. An InvestingPro Tip highlights the company’s aggressive share buyback strategy, which can often be a sign of management’s belief in the company’s value and future prospects. Additionally, GoDaddy has been trading with low price volatility, suggesting a stable investment for those looking to avoid large swings in stock price.

The financial data also reveals a robust revenue growth of 5.91% over the last twelve months as of Q2 2024, with a gross profit margin of 63.16%, indicating strong profitability. The company’s operating income margin stands at 18.06%, which is a testament to its efficient operations. Another InvestingPro Tip points out that analysts predict GoDaddy will be profitable this year, which is corroborated by the company’s solid basic and diluted earnings per share (EPS) of $12.57 and $12.26, respectively.

Investors should note that GoDaddy is trading near its 52-week high, with its price at 97.93% of this peak. This could be indicative of strong market sentiment and the potential for continued growth. For those considering an investment, InvestingPro has additional tips available, offering deeper insights into GoDaddy’s financial health and growth potential.

It’s worth mentioning that the company does not pay dividends, which may influence investment decisions for income-focused investors. However, for those interested in capital gains, GoDaddy’s high return over the last year, with a 127.14% total price return, is certainly noteworthy. With 16 additional InvestingPro Tips available, investors can gain a comprehensive understanding of GoDaddy’s investment profile.

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