U.S. markets close in 2 hours 38 minutes
  • S&P 500

    3,376.19
    -89.20 (-2.57%)
     
  • Dow 30

    27,454.72
    -880.85 (-3.11%)
     
  • Nasdaq

    11,271.95
    -276.33 (-2.39%)
     
  • Russell 2000

    1,593.90
    -46.60 (-2.84%)
     
  • Crude Oil

    38.64
    -1.21 (-3.04%)
     
  • Gold

    1,906.90
    +1.70 (+0.09%)
     
  • Silver

    24.50
    -0.17 (-0.69%)
     
  • EUR/USD

    1.1825
    -0.0044 (-0.37%)
     
  • 10-Yr Bond

    0.8010
    -0.0400 (-4.76%)
     
  • GBP/USD

    1.3023
    -0.0015 (-0.11%)
     
  • USD/JPY

    104.8520
    +0.1620 (+0.15%)
     
  • BTC-USD

    12,900.46
    -249.56 (-1.90%)
     
  • CMC Crypto 200

    257.16
    -6.26 (-2.38%)
     
  • FTSE 100

    5,792.01
    -68.27 (-1.16%)
     
  • Nikkei 225

    23,494.34
    -22.25 (-0.09%)
     

Is GoDaddy Inc. (NYSE:GDDY) Potentially Undervalued?

Simply Wall St
·3 mins read

GoDaddy Inc. (NYSE:GDDY) saw a decent share price growth in the teens level on the NYSE over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s examine GoDaddy’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for GoDaddy

What is GoDaddy worth?

Good news, investors! GoDaddy is still a bargain right now. According to my valuation, the intrinsic value for the stock is $101.01, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, GoDaddy’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What kind of growth will GoDaddy generate?

earnings-and-revenue-growth
earnings-and-revenue-growth

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. GoDaddy’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since GDDY is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on GDDY for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy GDDY. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Every company has risks, and we've spotted 2 warning signs for GoDaddy (of which 1 is significant!) you should know about.

If you are no longer interested in GoDaddy, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.