Market Overview

Godaddy Gains On Raft Of Favorable Coverage

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Godaddy Inc (NYSE: GDDY) shares gained Monday as a raft of analysts launched mostly favorable coverage on the Web hosting company.

The Scottsdale, Arizona-based company is off more than 1 percent since going public last month, but traded Monday at $25.90, up 4 percent.

With roughly three-quarters of the world's 76 million small businesses currently operating without a website, several analysts said that spells an obvious opportunity.

Barclay's Paul Vogel said Godaddy has a "mid-teens share" of a market he put at between $11 billion and $16 billion.

Vogel assigned an Overweight rating and $32 target on Godaddy.

The company's revenue last year grew about 23 percent to $1.39 billion and its adjusted loss narrowed to $0.95 a share, from $1.32 a share.

Although Godaddy has a long history of losses from its 18 years in business, its subscription business model "gives us visibility into cash flow growth," Morgan Stanley's Brian Essex said.

Essex rates Godaddy at Overweight with a $29 target.

Citi's Mark May compared the low-churn subscriptions to "an annuity like stream" that ensures revenue growth.

Godaddy will see compounded three-year revenue growth of 14 percent while margins widen as the company increasingly focuses on expanding the range of its services, according to May.

May rated Godaddy at Buy with a $32 target.

Coverage on the company got launched Monday with an Outperform rating at both Oppenheimer and JMP Securities, with analysts citing "secular tailwinds" and the company's increasingly "full-service approach" to its customers.

But Stifel's Scott W. Devitt launched with a Hold rating on Godaddy.

Although Godaddy has a leading market share, "the shares have priced in much of our expected growth," Devitt said.

Latest Ratings for GDDY

DateFirmActionFromTo
Nov 2020RosenblattMaintainsBuy
Nov 2020Piper SandlerMaintainsOverweight
Aug 2020CitigroupMaintainsBuy

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Posted-In: Barclay Brian Essex Citi Mark MayAnalyst Color Price Target Initiation Analyst Ratings

Latest Ratings

StockFirmActionPT
JNJCantor FitzgeraldMaintains200.0
PCTYJMP SecuritiesMaintains220.0
ADIBarclaysMaintains170.0
AMATBarclaysMaintains115.0
KMBRBC CapitalMaintains147.0
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