Citi raises GoDaddy stock price target to $260

On Friday, Citi analysts updated their stance on GoDaddy Inc (NYSE: NYSE:GDDY), raising the price target to $260 from the previous $251 while maintaining a Buy rating on the stock. This adjustment follows GoDaddy's fourth-quarter earnings, which surpassed expectations and marked another instance of the company's strong performance. The company's stock has demonstrated remarkable momentum, delivering a 90.5% return over the past year and currently trading near its 52-week high of $216. InvestingPro data reveals 14 additional key insights about GoDaddy's performance and valuation metrics.

The firm's analysts noted GoDaddy's conservative yet promising initial guidance for 2025, suggesting there is considerable potential for upward revisions. Despite a 4% dip in after-hours trading, analysts believe the market reaction does not fully reflect the robust quarterly results. With an impressive overall Financial Health Score of "GREAT" according to InvestingPro analysis, GoDaddy's fundamentals appear solid.

Citi has increased its estimates for GoDaddy's 2025 revenue, net earnings before interest, taxes, depreciation, and amortization (NEBITDA), and free cash flow (FCF). The analysts highlighted management's tendency to set cautious guidance, with the highest revenue growth forecast at 8% year-over-year. Furthermore, the expectation that bookings will outpace revenue growth indicates sustained momentum for the company.

Product development at GoDaddy is yielding positive results, with Airo/GenAI gaining momentum and customers showing a higher propensity to purchase additional products and spend more. The analysts also pointed out that management is anticipating a significant contribution from Pricing & Bundling initiatives in both the A&C and Core Product segments by 2025.

GoDaddy's strong generation of free cash flow per share, which is compounding at a rate of over 25%, was another highlight of the report. With the stock trading at 15 times the price to free cash flow and a P/E ratio of 16.1, Citi analysts see GoDaddy's shares as undervalued and attractive for investors. However, InvestingPro's Fair Value analysis suggests the stock might be slightly overvalued at current levels. For deeper insights into GoDaddy's valuation and growth prospects, including access to the comprehensive Pro Research Report covering 1,400+ top stocks, consider an InvestingPro subscription.

In other recent news, GoDaddy Inc. reported Q4 earnings that fell short of analyst expectations, despite beating revenue projections. The web hosting company posted adjusted earnings per share of $1.36, missing the consensus estimate of $1.43. On the other hand, GoDaddy's revenue for the quarter reached $1.19 billion, slightly above the projected $1.18 billion and marking an 8.4% year-on-year increase.

These are part of the recent developments for the company. For the upcoming year, GoDaddy's outlook aligns with expectations, forecasting first-quarter revenue between $1.175 billion and $1.195 billion, and full-year revenue between $4.86 billion and $4.94 billion.

The company also reported total bookings of $1.22 billion for Q4, up 8.8% YoY, with its normalized EBITDA margin expanding to 32.3% from 29.5% a year earlier. Despite the earnings miss, GoDaddy underscored its continued focus on profitability and cash generation, with Q4 free cash flow up 12.1% YoY to $342 million.

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