Piper Jaffray Is Buying The GoDaddy Pullback

In a report published Tuesday, Piper Jaffray analyst Gene Munster maintained an Overweight rating on

, with a price target of $36. "We would be buyers of GDDY after the 18% pullback over the past month," analyst Gene Munster said, while adding that the company's value was "perhaps the most misunderstood in our coverage." There is likely to be limited upside on the company's June 2015 report, which is scheduled to be released on August 5. Munster expects the company to "develop a consistent slight beat and slight guide up pattern as ARPU increase from product adoption and customer count grow as international and new channels are further penetrated," which should result in "a premium multiple." "GoDaddy's strong brand awareness has created a large business, with 9M customers in the US and 3.7M OUS," Munster wrote and added that the company may be expected to enter other markets by the end of this year. With China offering "a very large opportunity," the underpenetrated market OUS could be as high as 150M users, the analyst said. In the report Piper Jaffray noted, "Shares are currently trading at 14x 2016E EBTIDA, below its peer group at 15x. This disconnect is unwarranted in our view for several reasons, including a much lower relative risk of disintermediation, the lack of significant taxes for the next 20 years, very strong opportunities in product and geographic expansion, and comparative stability."