GoDaddy stock maintains outperform rating at RBC on strong FCF outlook

Published 23/06/2025, 15:50
GoDaddy stock maintains outperform rating at RBC on strong FCF outlook

Investing.com - RBC Capital reiterated its outperform rating and $225.00 price target on GoDaddy Inc (NYSE:GDDY) following investor meetings with the company’s CFO and VP of Investor Relations last week. Currently trading at $176, the stock sits below analyst targets ranging from $150 to $250, according to InvestingPro data.

The firm highlighted that GoDaddy is approaching a positive inflection point on active customers and will soon be lapping tough comparisons, with management reaffirming confidence in achieving over $1.5 billion in free cash flow for 2025. The company’s strong financial health is reflected in its current levered free cash flow of $1.37 billion and robust revenue growth of 7.7% over the last twelve months.

RBC noted ongoing debate about mix versus price-led growth in the web design space, with GoDaddy management indicating they have multiple strategies planned for the coming years to continue driving product attachment and mix improvements.

The research firm emphasized that GoDaddy’s insulation from macroeconomic pressures is stronger than previously recognized, and that advancements in Agentic AI should continue expanding the company’s value-added product opportunities.

RBC acknowledged that GoDaddy’s multiple has recently contracted as the company only reiterated guidance against elevated expectations, but suggested the company’s 2026 targets should be viewed as a milestone rather than an endpoint, with the durability of Applications & Commerce product drivers potentially underappreciated by investors.

In other recent news, GoDaddy Inc. reported strong financial results for the first quarter of 2025, exceeding analyst expectations with an earnings per share of $1.51 against a forecast of $1.38. The company’s revenue also surpassed projections, reaching $1.2 billion compared to an expected $1.19 billion, marking an 8% year-over-year growth. Despite these positive earnings, GoDaddy’s stock experienced a decline in after-hours trading. Additionally, GoDaddy’s free cash flow increased by 26% to $411 million, while customer count remained stable at 20.5 million. Following the earnings report, Cantor Fitzgerald raised its price target for GoDaddy to $190, maintaining a Neutral rating, acknowledging the company’s revenue and EBITDA figures exceeded Wall Street estimates. Meanwhile, JPMorgan increased its price target for GoDaddy to $240, keeping an Overweight rating, citing confidence in the company’s long-term growth potential and strategic initiatives. Benchmark analysts also maintained a Buy rating with a $250 price target, highlighting GoDaddy’s advancements in artificial intelligence and its potential to attract higher-value clients. These developments reflect GoDaddy’s continued focus on growth and strategic positioning in the market.

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