Godaddy Inc (GDDY)

Conclusion

GoDaddy operates cloud-based products for small businesses, from website building, marketing tools and payments to domain registration and aftermarket services. At 111.71 USD on 9 November 2026, the company has a market capitalisation of 13.5 billion USD and an enterprise value of 16.3 billion USD.

The verdict is undervalued. Today's multiples sit far below their own ten-year medians: P/E of 14.1 against a median of 47.5, and EV/EBITDA of 11.2 against a median of 27.5. The DCF gives 291.07 USD per share at a discount rate of 9.6%, and the fair value from historical multiples is 301.57 USD. The fair value band runs from 237.06 to 355.58 USD with a midpoint of 296.32 USD, a margin of safety of 165.3% at the current price. The reverse DCF implies growth of -3.5% a year, against revenue growth of 8.3% over five years and free cash flow per share growth of 22.6%.

The strongest numbers are ROIC of 45.7% against a WACC of 8.4%, free cash flow conversion of 181.3% on a trailing basis, and an operating margin of 26.0%. The weakest are the Altman Z-score of 1.45, which sits in the distress zone, a current ratio of 0.61, and negative shareholder equity. If liquidity or debt service weakened, the low multiples would offer less protection.

Financial health

Financial strength is red: the Altman Z-score and the current ratio are assessed as bad, while net debt to EBITDA of 1.87x and interest coverage of 9.16x are assessed as good. At 30 September 2026 the current ratio is 0.61 and the quick ratio is 0.38, so short-term obligations are not covered by liquid assets. Debt to equity is not available. The Altman Z-score of 1.45 falls in the distress zone, although the Altman model was designed for manufacturers and GoDaddy is not one. Insolvency risk: medium, about 9.6% by the estimate of the Ohlson model over one to two years. The company has negative shareholder equity, which leaves no equity cushion beneath its liabilities.

Earnings quality

Earnings quality is green, held up by free cash flow conversion and a shrinking share count, while the Piotroski score is neutral. Free cash flow conversion is 181.3% on a trailing basis and 140.2% over five years, and free cash flow after stock-based compensation is 1.5 billion USD. Stock-based compensation is 5.6% of revenue. The accrual ratio is -0.089, which points to cash earnings running above reported earnings. Share count has fallen at a compound rate of 3.6% over five years, which means buybacks. The Piotroski score is 5 out of 9. The Beneish M-score is not available. The company beat earnings estimates in 5 of the last 8 quarters, with an average surprise of 3.3%. Current-year estimates were revised up 2.0% over 90 days, and next-year estimates were flat, at -0.03%.

Profitability

Profitability is green. The operating margin of 26.0% is well above its ten-year median of 9.1%, and the net margin of 18.6% is above its median of 6.2%. The gross margin of 63.8% is close to its median of 64.2%. Operating margin has been stable, at 61.0% on an annual basis. ROIC of 45.7% against a WACC of 8.4% gives a ROIC minus WACC value of 37.3%, which is assessed as creating value. Return on equity is not available, and with negative equity it would not be meaningful. The DuPont split for 2025 shows a net margin of 17.7%, an asset turnover of 0.62 and an equity multiplier of 37.35. Returns therefore rest on margins and asset use, while leverage magnifies the equity figures.

Growth

Growth is green. Revenue has compounded at 6.6% over three years, 8.3% over five years and 11.9% over ten years. Revenue has grown in all 10 of the last 10 comparable years. Earnings per share grew at a compound rate of 41.8% over three years, a rate boosted by the share count reduction. Free cash flow per share compounded at 25.3% over three years, 22.6% over five years and 13.8% over ten years. The consensus next-year earnings growth estimate is 15.1%.

Valuation

Valuation is green, as all four current multiples trade well below their ten-year medians. P/E is 14.1 against a median of 47.5, a premium of -70.4%. EV/EBITDA is 11.2 against 27.5, a premium of -59.2%. P/FCF is 7.8 against 20.6, a premium of -62.3%, and P/S is 2.6 against 4.2, a premium of -37.5%. The DCF gives 291.07 USD per share at a discount rate of 9.6%, with a terminal value share of 56.5%. The reverse DCF implies growth of -3.5%, against five-year revenue growth of 8.3% and five-year free cash flow per share growth of 22.6%. The company pays no dividend. The fair value band is built on fixed assumptions, including a 5% equity risk premium and capped growth, so it is an order-of-magnitude estimate and not a price target.

Risks

The weak numbers would hit different parts of the business. A current ratio of 0.61 and a quick ratio of 0.38 leave little room if cash inflows slowed. An Altman Z-score of 1.45 and an estimated insolvency probability of 9.6% reflect the same pressure on the balance sheet. Negative shareholder equity means that any further loss would deepen the deficit. The reverse DCF shows that the current price assumes shrinking cash flows, so the verdict depends on the free cash flow holding up. Around 56.5% of the DCF value sits in the terminal value, which makes the result sensitive to the long-term assumptions. Debt to equity, return on equity, the Beneish M-score and the current price-to-book multiple are not available. This analysis has no debt maturity schedule and no revenue split by segment, so it cannot show when debt falls due or which part of the business drives growth.