On Thursday, B.Riley maintained a Buy rating on GoDaddy Inc (NYSE:GDDY) and increased the price target to $142 from $124. This adjustment comes after a positive Investor Day held on Wednesday, March 6, 2024, where GoDaddy's management presented an optimistic medium-term growth and profitability outlook. The company also discussed various initiatives aimed at driving growth and enhancing cost efficiency.
The focus of these initiatives includes the deployment of GoDaddy's Gen AI Assistant, named Airo, which is designed to increase customer engagement with more than two products. The tool has already demonstrated encouraging results according to the firm. Additionally, GoDaddy is utilizing data analytics and artificial intelligence across its operations, from customer care to marketing, to improve operational efficiency.
These technological advancements have strengthened B.Riley's confidence in GoDaddy's margin outlook. The firm also highlighted the company's financial position, noting that GoDaddy is trading at approximately 12 times its free cash flow per share. Moreover, GoDaddy is expected to generate over $4.5 billion in cumulative free cash flows over the next three years.
B.Riley also pointed to GoDaddy's active share repurchase program as a factor contributing to the stock's attractiveness. The combination of GoDaddy's financial strategy and the integration of AI and data analytics into its business model has led to a positive assessment of the company's risk/reward balance by the firm.
InvestingPro Insights
GoDaddy Inc (NYSE:GDDY) has been in the spotlight following a buoyant Investor Day, and the subsequent optimism from analysts is reflected in the company's recent financial metrics and strategic maneuvers. According to InvestingPro data, GoDaddy boasts a robust Market Cap of $15.61 billion, underlining its significant presence in the internet services sector. The company's P/E Ratio stands at 12.01, with an adjusted P/E Ratio for the last twelve months as of Q4 2023 at 10.66, suggesting that the company is potentially undervalued compared to earnings.
With a keen eye on shareholder value, GoDaddy's management has been actively engaged in share buybacks, a move that aligns with the InvestingPro Tip highlighting the company's high shareholder yield. This strategy not only reflects confidence from management but also serves to enhance earnings per share over time. Moreover, GoDaddy's stock is known to exhibit low price volatility, providing a sense of stability for investors, another InvestingPro Tip worth considering.
On the operational front, GoDaddy's Gross Profit Margin for the last twelve months as of Q4 2023 was a healthy 63.01%, showcasing the company's ability to maintain profitability amidst its growth initiatives. This financial health is a critical factor as GoDaddy continues to leverage AI and data analytics to streamline operations and improve customer engagement.
For investors seeking further insights, InvestingPro offers additional tips on GoDaddy, including analysis on valuation multiples and profitability forecasts. There are 12 more InvestingPro Tips available, which can be explored for deeper strategic analysis. To access these insights and enhance your investment strategy, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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