Valued at a market cap of $28.6 billion, GoDaddy Inc. (GDDY) designs and develops cloud-based products for small businesses, web design professionals, and individuals. The Tempe, Arizona-based company is an internet domain registrar and web hosting company that also sells e-business-related software and services.
Companies worth $10 billion or more are generally described as “large-cap” stocks, and GoDaddy fits right into that category, with its market cap exceeding this threshold. The software company is known for its website-building tools, great 24/7 support, and an all-inclusive package with SEO support. It serves over 22 million customers and generates revenues from three segments: Domains, Hosting and Presence Offerings, and Business Applications.
GDDY is currently trading 5.5% below its 52-week high of $211.11, reached recently on Dec. 16. Shares of this website-building company have rallied 27.2% over the past three months, significantly outperforming the broader Technology Select Sector SPDR Fund’s (XLK) 3.9% increase during the same time frame.
Moreover, in the longer term, GDDY has soared 87.9% over the past 52 weeks, massively outpacing XLK’s 21.8% returns. On a six-month basis, shares of GDDY are up 42.8%, significantly surpassing XLK’s 3.6% gains over the same time frame.
To confirm its bullish trend, GoDaddy has been trading above its 200-day moving average for the past year and has remained above its 50-day moving average since early October.
Shares of GDDY closed up 3.2% after releasing its solid Q3 results on Oct. 30. Strong revenue growth in its Applications and Commerce (A&C) segment and a 9% year-over-year increase in total bookings led to a 7.3% annual growth in the company’s revenues to $1.15 billion.
Meanwhile, a 420-bps annual expansion in normalized EBITDA margin and a notable 650-bps operating margin expansion from the year-ago quarter led to a whopping 48.3% year-over-year growth in EPS to $1.32. Both the top-line and bottom-line figures surpassed the Wall Street estimates.
Noting its strong Q3 performance, the company raised its full-year 2024 revenue guidance in the range of $4.545 billion to $4.565 billion and also raised its normalized EBITDA margin expectations to approximately 30%. This might have further bolstered investor confidence.
GDDY’s outperformance becomes more evident when compared to its rival, Wix.com Ltd. (WIX), which gained 76.7% over the past 52 weeks and 36.7% on a six-month basis.
Given GoDaddy’s recent outperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 17 analysts covering it, and the mean price target of $201.53 suggests a slight 1% premium to its current levels.
