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GoDaddy Surges On Strong Guidance, 216K More Net Customers

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GoDaddy Surges On Strong Guidance, 216K More Net Customers

Godaddy Inc (NYSE: GDDY) shares were soaring over 10 percent Friday, one day after the company delivered a fourth-quarter sales beat and raised its sales outlook for the full fiscal year. 

The Analyst

JMP Securities analyst Ronald Josey reiterated a Market Perform rating and raised the price target from $60 to $68.

The Thesis

GoDaddy delivered strong fourth-quarter results that saw 216,000 net customer additions, placing its total customer base at 17.34 million, an increase of 18 percent year-over-year.

“We believe 4Q17’s momentum continues into 2018 with benefits from new products, acquisition synergies and improved operating leverage,” Josey said in a Friday note. 

GoDaddy’s recent acquisition of Main Street Hub, a company that helps small business clients manage their social media engagement, expands its web hosting-service offerings significantly, the analyst said. 

CEO Scott Wagner suggested there are approximately 2 million GoDaddy customers who could use Main Street Hub’s tools for its social media management. Main Street Hub’s most popular plan is $499 per month. The acquisition is expected to add roughly $20 million in revenues for GoDaddy in the second half of 2018, Josey said. 

GoDaddy’s GoCentral website builder tool is also becoming a core focus of the company, according to JMP. Hundreds of thousands of websites have been published with GoCentral, and the company is focused on improving its exposure across its 17.3 million customers, Josey said. 

Organic domain growth was also a key highlight in GoDaddy's quarter, rising at a12-percent clip sequentially on strength from international, improved renewal rates and aftermarket domain sales.

Price Action

Shares were up 10.77 percent at $61.40 at the time of publication Friday afternoon. 

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Photo courtesy of GoDaddy. 

Latest Ratings for GDDY

DateFirmActionFromTo
Aug 2020CitigroupMaintainsBuy
Aug 2020WedbushMaintainsOutperform
Aug 2020JP MorganUpgradesNeutralOverweight

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