Is GoDaddy Stock Outperforming the Dow?
Tempe, Arizona-based GoDaddy Inc. (GDDY) designs and develops cloud-based products for small businesses, web design professionals, and individuals. Valued at $25.6 billion by market cap, the company’s platform provides applications that help them connect to their customers, manage their businesses, and get found online.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and GDDY perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the software - infrastructure industry. GDDY's robust business model, high brand awareness, and customer loyalty contribute to its competitive edge. Strategic expansion into omnicommerce solutions and a commitment to deploying new technologies like AI and machine learning further enhance its value proposition and innovation in product development and customer service.
Despite its notable strength, GDDY slipped 17.9% from its 52-week high of $216, achieved on Jan. 30. Over the past three months, GDDY stock declined 3.7%, underperforming the Dow Jones Industrials Average’s ($DOWI) marginal gains during the same time frame.
In the longer term, shares of GDDY dipped 10.1% on a YTD basis, underperforming DOWI’s YTD gains of 1%. However, the stock climbed 25.6% over the past 52 weeks, outperforming DOWI’s 9.9% returns over the last year.
To confirm the recent bearish trend, GDDY has been trading below its 50-day and 200-day moving averages since early June.
GDDY's strong performance is driven by robust growth in applications and commerce revenue, complemented by increased core platform revenue, which collectively fueled its growth.
On May 1, GDDY reported its Q1 results, and its shares closed down more than 8% in the following trading session. The company’s revenue was $1.2 billion, matching Wall Street forecasts. The company expects full-year revenue in the range of $4.86 billion to $4.94 billion.
GDDY’s rival, VeriSign, Inc. (VRSN) shares have lagged behind the stock, with 36.5% gains on a YTD basis and a 58.8% uptick over the past 52 weeks.
Wall Street analysts are moderately bullish on GDDY’s prospects. The stock has a consensus “Moderate Buy” rating from the 18 analysts covering it, and the mean price target of $217.88 suggests a potential upside of 22.8% from current price levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.