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Investing.com - Piper Sandler upgraded GoDaddy Inc (NYSE:GDDY) from Neutral to Overweight on Friday, while raising its price target to $182.00 from $177.00. According to InvestingPro data, the company maintains strong profitability with a 64% gross margin and has demonstrated consistent revenue growth of 7.7% over the last twelve months.
The research firm cited the web hosting company’s shares entering "oversold territory" following a 32% retreat since its fourth-quarter earnings report, despite GoDaddy being "a remarkably consistent business." This observation aligns with InvestingPro analysis, which shows the stock trading near its 52-week low of $146.81, with technical indicators suggesting oversold conditions. InvestingPro subscribers have access to 12 additional key insights about GDDY’s current market position.
Piper Sandler noted that GoDaddy currently trades at approximately 12 times calendar year 2026 free cash flow (FCF), representing an 8% FCF yield, approaching pre-pandemic valuation levels despite significant progress in AI product packaging, margins, and shareholder-focused capital allocation.
The firm expressed confidence that GoDaddy is "well on the path to $13 FCF/share in 2026," which it believes easily justifies a share price above $180.
On a tactical level, Piper Sandler highlighted that improvements in cash conversion have driven an increase in fiscal year FCF growth projections from 11% at the beginning of the year to 18% currently, with second-half NEBITDA expansion looking "very conservative."
In other recent news, GoDaddy Inc. reported its second-quarter 2025 earnings, revealing an earnings per share (EPS) of $1.41. This result slightly surpassed the forecast of $1.38, marking a 2.17% surprise. The company’s revenue aligned with expectations, coming in at $1.21 billion. Despite the modest EPS beat, the stock saw a decline in premarket trading, highlighting investor caution. These developments come amidst a backdrop of mixed market reactions to earnings reports. Analysts had anticipated the earnings figures, and the results reflect a stable financial performance for the quarter. The company’s ability to meet revenue expectations while slightly exceeding EPS forecasts is noteworthy for investors.
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