On Friday, GoDaddy Inc (NYSE: NYSE:GDDY) experienced an optimistic adjustment in its stock outlook as B.Riley maintained a Buy rating and increased the price target to $170 from the previous $143. This upward revision reflects a positive anticipation of the company's future financial performance.
The decision to raise the price target is based on a forward-looking discounted cash flow (DCF) model that now extends to the year 2025, suggesting a robust financial trajectory for GoDaddy. The company is seen as an early-stage beneficiary of the emerging GenAI technology, which is expected to enhance customer interactions and improve the efficiency of internal operations.
B.Riley's assessment indicates that GoDaddy is poised for sustained revenue growth, particularly in its Applications and Commerce (A&C) segment. This growth is anticipated to be complemented by steady improvements in profit margins, attributed to the benefits of scaling the business and achieving greater operational efficiency.
The firm also forecasts that GoDaddy's substantial and increasing free cash flows (FCFs) will facilitate share buybacks, thereby contributing to a healthy double-digit rise in both earnings per share (EPS) and FCF per share. This financial strength, when considered alongside the company's 2025 FCF valuation at approximately 15.3 times, presents what B.Riley views as an attractive risk/reward scenario for investors.
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