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GoDaddy (GDDY) Hits 52-Week High: What’s Driving the Stock?


Shares of GoDaddy Inc. GDDY hit a 52-week high of $45.26 on Aug 9, before closing a tad lower at $44.

The company’s shares have charted a solid trajectory in recent times, appreciating over 33.4% over the last one year, ahead of the industry’s gain of roughly 12.8%. Notably, the company has witnessed an 3.7% jump in share price since it posted encouraging second-quarter 2017 results.

Let’s find out what’s supporting the rally.

Earnings & Revenues Beat Estimates, Rise Y/Y

The company reported strong second-quarter results wherein both earnings and revenues exceeded the Zacks Consensus Estimate.

Non-GAAP earnings of 13 cents per share were up significantly from a penny in the prior quarter and a loss of 11 cents per share in the year-ago quarter. Revenues of $558 million increased 13.9% sequentially and 22.3% year over year.

GoDaddy Inc. PE Ratio (TTM)

Impressive Guidance

Management provided strong guidance for the third quarter and expects revenues in the range of $577–$582 million, up 3.9% at mid-point.

For full-year 2017, GoDaddy raised the lower end of its revenue guidance. It now expects revenues in the range of $2.215 to $2.225 billion compared with its earlier guidance of $2.195–$2.225 billion. The new guidance represents year-over-year growth of approximately 20%.

Strong Product and Marketing Roadmap for 2017

GoDaddy’s strong product and marketing roadmap for 2017 is a big positive. The company’s new mobile-optimized website builder, GoCentral, has been gaining momentum. The company intends to release additional new GoCentral verticals, markets and features throughout 2017. During the quarter, the company also witnessed a 17.8% increase in its customer base from the year-ago quarter.

Host Europe Buyout

In April, GoDaddy completed the acquisition of Host Europe Group for €1.69 billion (US$1.79 billion) and the integration remains well on track. The deal expands GoDaddy's presence in international markets. It also complements GoDaddy's business as HEG has a similar customer base comprising small ventures and web professionals.

Going Forward

Investment in products, its technology platform, international expansion and customer care as well as delivering innovative and increasingly personalized products and services globally should drive shareholder value.

Zacks Rank and Stocks to Consider

GoDaddy currently has a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader sector include Alibaba BABA, Lam Research Corporation LRCX and Luxoft Holding LXFT, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term expected earnings per share growth rate for Alibaba, Lam Research and Luxoft is projected to be 29%, 17.2% and 20%, respectively.

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