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Market vs. Management: Who Wins GoDaddy's Value War?
16 Jul
Summary
- GoDaddy has repurchased $3.7 billion of stock in three years.
- Revenue grew 7.8% TTM, with AI tools reaching $10M bookings.
- Bookings grew only 3% last quarter, signaling execution risks.
A significant divergence exists between GoDaddy's market valuation and its management's conviction. The company, which empowers over 20 million entrepreneurs with online tools, sees its stock trading approximately 46% below its 52-week high. This contrasts sharply with GoDaddy's own aggressive buyback program.
Over the past three years, GoDaddy has repurchased $3.7 billion of its stock, reducing fully diluted shares by more than 31%. This capital return significantly exceeds stock-based compensation, underscoring management's belief that the shares are undervalued. This confidence is bolstered by financial performance, including a 7.8% TTM revenue growth and a healthy 24% operating margin.
GoDaddy is also undergoing an AI transformation, with new tools like Airo AI Builder rapidly scaling. However, market skepticism persists due to a mere 3% growth in total bookings last quarter. This slower forward-looking metric suggests potential execution risks as the company navigates its AI product rollout and balances it with its established business model.
