GoDaddy’s Stock Price (GDDY) Makes A New 52Wk Low Into Earnings

GoDaddy's stock (NYSE: GDDY) is under pressure into today's earnings, down 4% on the day, and hitting a fresh 52 week low at $148.10 as risk comes off the table into the print.

Analysts project earnings per share (EPS) of $1.34 for the current quarter, representing a healthy improvement on the $1.01 in the same period Y/Y. Revenue is expected to have grown more modestly at 7.35%, to bring in the quarter at $1.21billion.

Looking to the previous report, and whilst it was not bad, growth is slowing. The company reported total revenue of $1.2 billion, an 8% year-over-year increase, whilst the Core Platform segment, while growing at a slower pace of 3%, still contributed a substantial $747.9 million. Crucially, adjusted earnings per share (EPS) came in at $1.51, exceeding analyst expectations of $1.38.

GoDaddy's management has been actively pursuing strategic initiatives aimed at long-term growth. The expansion of the Airo platform, designed to enhance customer engagement, is a key focus. With nearly 3 million customers and over half actively using its features, Airo is proving to be a valuable asset.

Furthermore, the company's deployment of AI-powered customer service tools reflects a commitment to operational efficiency and cost optimization. GoDaddy's stated goal of achieving a normalized EBITDA margin of 33% by 2026 signals a confident outlook on its ability to drive profitability.

While the prevailing narrative focuses on GoDaddy's positive earnings and strategic initiatives, a more cautious perspective is warranted. The company's reliance on its Core Platform segment, while still substantial, presents a potential vulnerability. The growth rate of this segment lags behind the A&C segment, suggesting that GoDaddy may need to accelerate its efforts to diversify its revenue streams.

Furthermore, the web hosting and domain registration market is becoming increasingly competitive, with new entrants and established players vying for market share. GoDaddy's ability to maintain its dominance in this landscape is not guaranteed.