GoDaddy Inc. (GDDY): what the price requires
At today's price, GoDaddy Inc. (GDDY) is priced for -4.0% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/GDDY
Headline
| Field | Value |
|---|---|
| Ticker | GDDY |
| Company | GoDaddy Inc. |
| Current price | $90.69/sh |
| Composition | Applications and commerce 38% / Core platform: domains 47% / Core platform: other 15% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 4.2% |
| Operating margin today | 22.7% |
| Margin compression implied | -18.5pp |
| Implied growth | -4.0% |
| Multiple paid | 13x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 7.9% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~5.9pp.
Reconcile: at the x-ray's 9.3% required return this reads ~3.6%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -2.68σ |
| cohort percentile (of 177 peers) | 16 |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.02x | 4 | expensive |
| Earnings | 1.16x | 5 | expensive |
| Relative | 0.48x | 5 | justifies |
| Growth | 0.60x | 3 | justifies |
Families that justify the price: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.2%); the inversion above states its own rate.
Per-Model Detail (n=17)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $418.85 | 0.22x | yes | FCF base $1.8B, growth 8% (input: historical growth), terminal g 4.0%, WACC 7.2%, 6yr projection |
| DCF Exit Multiple | Growth | $151.46 | 0.60x | yes | Exit EV/EBITDA: 10.3x / 12.3x / 14.3x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $175.14 | 0.52x | yes | P/E 26.6x (blended: static sector reference 35x + trailing (TTM) 14x), scenarios: 22.3x / 26.6x / 30.9x (bear / base = reference held flat / bull), EV/EBITDA 19.93x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $70.05 | 1.29x | yes | BV/sh $1.77, ROE (TTM) 366.7%, ke 9.3% |
| Two-Stage Excess Return | Asset | $1813.80 | 0.05x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $74.16 | 1.22x | yes | Rev $5.0B, growth 8% (input: historical growth; tapered), Terminal P/S: 2.0x / 2.4x / 2.8x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $126.11 | 0.72x | yes | EPS $6.31, growth 20% (input: historical EPS growth), PEG=0.70 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $32.29 | 2.81x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.78B × (1−24%) / WACC 7.2% → EPV (no growth) |
| Residual Income | Asset | $121.86 | 0.74x | yes | BV $1.77 + 5yr PV of (ROE (TTM) 366.7% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $15.84 | 5.73x | yes | √(22.5 × EPS $6.31 × BVPS $1.77) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $213.45 | 0.42x | yes | EBITDA $1.30B × sector EV/EBITDA 25.0x |
| FCF Yield | Earnings | $103.48 | 0.88x | yes | FCF $1641.3M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $78.30 | 1.16x | yes | SBC-adj FCF $1.33B (FCF $1.64B − SBC $0.31B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $203.60 | 0.45x | yes | EPS $6.31 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $1.42 | 63.87x | yes | BV $1.77 × (ROIC 5.8% / WACC 7.2%) (excluded from median) |
| P/Sales Sector | Relative | $299.28 | 0.30x | yes | Revenue $5.02B × sector P/S 8.0x |
| PEG Fair Value | Relative | $189.17 | 0.48x | yes | EPS $6.31 × (PEG 1.5 × growth 20.0% (input: historical EPS growth)) → PE 30.0x |
| Earnings Yield | Earnings | $68.22 | 1.33x | yes | EPS $6.31 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $3.8b |
| Net debt / NOPAT (after-tax) | 4.43x |
| Net debt / operating income (pre-tax) | 3.37x |
| Interest coverage | 7.4x |
| Burning cash | no |
Bullet Takeaways
- GoDaddy is a cash machine, not a melting asset: free cash flow near $1.64 billion on about $5 billion of revenue, a 24% operating margin, and a sticky small-business base on domains, hosting, and commerce.
- At $77 the stock sits below most valuation methods (blended landing near $155, SBC-adjusted FCF yield right at the price), with an inversion-implied margin near 4.2% versus the 23.7% earned today.
- The fragile assumption is durable mid-single-digit growth as AI reshapes web creation: bookings grew only 3% in Q1, Airo is promising but small, and the no-growth earnings-power floor near $34 shows how much rests on the growth-and-attach story.
Bull Case
The loudest worry about GoDaddy is that it is a slow-growing domains-and-hosting utility that AI will commoditize, a melting ice cube dressed up as a software stock. Take that fear seriously, then check it against the cash. GoDaddy is one of the most efficient cash generators in software: free cash flow near $1.64 billion on about $5 billion of revenue, an operating margin near 24%, interest coverage near 8x, and a multi-year history of using that cash to retire shares aggressively. A melting ice cube does not throw off a third of its revenue as free cash flow and keep expanding margins. The data undercuts the bear framing.
The business is stickier than the utility label suggests. GoDaddy is the default starting point for tens of millions of small businesses registering a domain, and the 10-K describes recording domain revenue on a gross basis because it takes control of the domain, with a portfolio of top-level domains offering alternatives to .com (FY2025 10-K, accession 0001609711-26-000010). Once a small business builds its web presence, email, and payments on GoDaddy, switching is disruptive, and the company keeps cross-selling higher-value Applications and Commerce products into that base. That segment, roughly 38% of revenue, grows faster and carries better economics than the core domains platform.
Far from being AI's victim, GoDaddy is monetizing it. Airo, its AI website-and-marketing builder, reached a $10 million-plus annualized bookings run rate within weeks of beta and grew from five to more than two dozen AI agents handling everything from logo design to marketing campaigns. Q1 2026 delivered adjusted EPS of $1.60 against a $1.52 estimate on $1.27 billion of revenue, with full-year guidance of $5.195 billion to $5.275 billion. The valuation methods see what the bear framing misses: the price near $77 (June 27, 2026) sits below most of them, with a blended landing near $155. A high-margin, cash-rich franchise turning AI into a new attach product is the opposite of a melting asset.
Bear Case
The price still leans on a specific assumption, and the most fragile one is that GoDaddy can keep growing revenue mid-to-high single digits while AI reshapes how small businesses get online. Total bookings grew only 3% in Q1 2026, and full-year revenue guidance implies growth in the mid-single digits, not the kind of acceleration a software multiple usually demands. The core platform, domains and hosting at more than 60% of revenue, is a mature, low-growth annuity. If the Applications and Commerce segment cannot keep pulling the average up, the whole company settles into low-single-digit growth, and the part of the valuation that assumes a software-like trajectory weakens.
The AI narrative cuts both ways. Airo is a genuine product, but the same generative-AI wave that lets GoDaddy build a $10 million bookings run rate also lets a small business spin up a website, logo, and marketing copy using general-purpose tools, or lets a competitor like Wix, Squarespace, Shopify, or a hyperscaler embed those capabilities for free. The assumption baked into the price is that AI is a net tailwind, a new product to sell, rather than a force that erodes the value of the website-builder and hosting products GoDaddy charges for. That is an open question, and the early Airo run rate is small relative to the $5 billion base it would need to move.
The balance-sheet and capital-structure picture adds a subtler fragility. GoDaddy operates with very thin book equity, about $1.77 per share, the legacy of years of debt-funded buybacks, which means the company's resilience rests entirely on its cash flow continuing rather than on any balance-sheet cushion. Net debt near $3.8 billion is about 3x trailing operating income, manageable while FCF is strong but a constraint if growth stalls and the multiple compresses. The earnings-power frame, which values the business at no growth, lands near $34, far below the price, a reminder that without the growth-and-attach story the stock has much further to fall than the cheap-on-the-methods framing implies.
Valuation
In effect, the market is pricing margins to fall by more than four-fifths, which is why the engine characterizes the stock as supported across asset-based, earnings-power, relative, and growth value rather than as a growth bet, despite the rich cash generation.
The model X-ray is wide but needs care because GoDaddy's tiny book value distorts the asset frames. The simple excess-return and ROE-based frames produce extreme readings (a 367% trailing ROE on $1.77 book value is an accounting artifact of the thin equity base, not a real return), so those should be discounted. The blended landing across applicable methods is near $155, roughly double the price, and the earnings-power frame near $34 marks the no-growth floor.
The spread is the information. GoDaddy converts a quarter of revenue to free cash flow, runs a 24% operating margin, and trades at a low-teens multiple of free cash flow, the combination value methods read as cheap. The peer set, TRIP, EPAM, FDS, SAIC, and CACI, is a mixed internet-and-services group rather than a clean web-platform comparable, so peer multiples carry moderate weight. The investable question is whether the discount reflects a real risk, that AI commoditizes the core and growth stalls, or an overcorrection on a sticky, cash-rich franchise. If the Applications and Commerce mix and Airo keep growth in the mid-single digits with stable margins, the gap to the methods is large; if growth fades to the low single digits, the price is closer to the no-growth earnings-power floor than the cheap framing suggests.
Catalysts
GoDaddy reported Q1 2026 on April 30, with revenue of $1.27 billion (in line) and adjusted EPS of $1.60, beating the $1.52 estimate, while total bookings grew 3% to $1.5 billion. Management guided full-year 2026 revenue to $5.195 billion to $5.275 billion, with bookings expected to track or exceed revenue growth, and the stock rose about 4% on the print. Airo AI Builder reached a $10 million-plus annualized bookings run rate within weeks of beta, expanding from five to more than two dozen AI agents.
The central catalyst is Airo's monetization curve. The data points to watch are whether the Airo bookings run rate scales into something material against the $5 billion revenue base and whether the Applications and Commerce segment keeps growing faster than the mature core platform, since that mix shift is what would justify the gap to the valuation methods. Continued share repurchases, funded by the strong free cash flow, are the steady lever on per-share results. The competitive response from Wix, Squarespace, Shopify, and the hyperscalers embedding AI website tools is the key external variable, since it determines whether AI is a net tailwind or a commoditizing force for GoDaddy's core products.
Sources: GoDaddy Q1 2026 results and call highlights (Motley Fool transcript, Yahoo Finance, IndexBox, TipRanks, 2026); FY2025 10-K (accession 0001609711-26-000010).
Peer Cohorts (Per Segment, With Filing Citations)
Applications and Commerce (A&C) (reported)
- WIX (Wix.com Ltd.)
- (no filing in the citation store)
- SHOP (Shopify Inc.)
- (no filing in the citation store)
- GLBE (Global-E Online Ltd.)
- (no filing in the citation store)
Core Platform (reported)
- WIX (Wix.com Ltd.)
- (no filing in the citation store)
- AKAM (AKAMAI TECHNOLOGIES, INC.)
- (no filing in the citation store)
- NET (Cloudflare Inc)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.