GDDY

Godaddy Inc

TMT


Presented:04/01/2021
Price:$80.21
Cap:$13.60B
Current Price:$162.92
Cap:$22.97B

Presented

Date04/01/2021
Price$80.21
Market Cap$13.60B
Ent Value$16.86B
P/E RatioN/A
Book ValueN/A
Div Yield0%
Shares O/S169.58M
Ave Daily Vol1,525,140
Short Int3.14%

Current

Price$162.92
Market Cap$22.97B
GoDaddy, Inc. engages in the provision of domain name registration and web hosting services. It provides website building, hosting, and security tools. The company was founded by Robert R. Parsons on January 1997 and is headquartered in Scottsdale, AZ.

Publicly traded companies mentioned herein: GoDaddy Inc (GDDY), Wix.com Ltd (WIX)

Highlights

The presenter is long shares of GoDaddy Inc (GDDY), the largest provider of domains in the world (30% market share), which is comparable to the next 10 largest domain registrars combined. The core domain hosting service is a GDP+ topline grower that he thinks can accelerate, and ultimately views the company as a MSD% – HSD% grower over a multi-year horizon with upside based on pricing. The core business is sticky (85%+ customer retention, 90%+ annual revenue retention), which is important because it serves as the top of the funnel to sell related services (e.g., website building, email hosting, etc.). He believes GDDY is positioned better than it was pre-COVID-19, as the company added a record number of users at higher LTVs and has improved its overall offering. Despite major improvements to the business, GDDY (~$80 per share) trades at just 13x the presenter’s fully taxed 2022 unlevered FCF estimate, which is cheaper than its pre-COVID valuation of 14x consensus 2021 expectations. From his 2022 estimate of $6.15 per share, he then expects unlevered FCF to grow at a mid-teen% – 20% rate for several years. Applying a 20x multiple to his 2023 projection of $7.30 per share implies ~80% upside to a share price of ~$146. 

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Idea Discussion

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