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GoDaddy (GDDY) Acquires Neustar's Registry Business, Stock Up

Zacks Equity Research
·3 mins read

GoDaddy Inc. GDDY recently announced that it has acquired Neustar Inc.'s Registry business for an undisclosed amount.

The financial terms of the deal have been still kept under wraps. The deal is expected to close in second-quarter 2020, subject to regulatory approvals and other customary closing conditions.

The new business entity will be known as GoDaddy Registry, which will have access to 12 million domains. This will be led by Nicolai Bezsonoff.

In response to the news, its shares went up almost 5% to a high of $61.76, eventually closing at $61.16.

GoDaddy Inc. Price and Consensus

 

GoDaddy Inc. Price and Consensus
GoDaddy Inc. Price and Consensus

GoDaddy Inc. price-consensus-chart | GoDaddy Inc. Quote

How Will the Deal Benefit GoDaddy?

Following the closure of the deal, GoDaddy will become one of the largest players in the Internet Infrastructure industry.

Neustar presents solutions in marketing, risk, communications and security. The company’s Registry business has an extensive portfolio of top-level domains. It owns several registries, including .biz and its own brand .neustar. It supports approximately 12 million domains, including 215 top-level domains.

Therefore, post the conclusion of the deal, GoDaddy will become both a domain name whole seller and a retailer, having an access to 12 million additional domains, which is huge. It will receive the wholesale price from all domain name registrars for registering domains for customers, which in turn will expand top-line growth.

The company stated that both the registry and registrar sides of the business will work independently to avoid any kind of scrutiny from the industry, as well as potential anti-trust investigators.

Going Forward

GoDaddy designs and develops cloud-based technology products for individuals, small businesses, and web design professionals. Its products include domain, hosting, presence, and business applications.

GoDaddy has been acquiring companies to bolster its domain name portfolio. It has acquired Afternic, which operates the world's largest premium domain reseller network, including 18 of the top 20 registrars. It also acquired the majority of domain names in a private company, Worldwide Media, Inc..

Going forward, its investments in products, technology platform, and customer care, as well as delivery of innovative and increasingly personalized products and services globally will drive shareholders’ value.

Zacks Rank & Stocks to Consider

Currently, GoDaddy carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Stamps.com Inc. STMP, eBay Inc. EBAY and Fiverr International Lt. FVRR. While Stamps.com sports a Zacks Rank #1 (Strong Buy), eBay and Fiverr International carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Stamps.com, eBay and Fiverr International is currently projected at 15%, 11.6% and 44.2%, respectively.

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