GDDY - GoDaddy: The Role Of AI And The Stock's Future Prospects

2024-05-23 23:02:13 ET

Summary

• GoDaddy's stock experienced a significant rise due to the promise of AI-driven growth, particularly through the launch of Airo AI tool.
• Despite increased sales, high variable costs from reliance on third-party providers limit GoDaddy's profitability.
• GoDaddy's growth pales compared to competitors like Wix, Squarespace, and HubSpot, highlighting its challenges in maintaining a competitive edge in an increasingly crowded market.
• The company's Q1 earnings are boosted by a one-time tax benefit. Adjusted PE ratio puts GoDaddy in the over-valued territory.

Investment Thesis

GoDaddy's ( GDDY ) recent stock surge marks a significant departure from its flat performance over the past five years, capturing investor attention. This surge has been driven by a compelling narrative: the promise of AI unlocking new growth avenues for the company, which is the largest domain name registrar and web-building platform for small businesses. The 14% growth in productivity tools sales, coinciding with the launch of their Airo AI tool, further reinforces this narrative....

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