GoDaddy could boost margins with focus on productivity apps, website subscriptions, says Barclays

GoDaddy

25/09/2024 15:10

** Barclays hikes PT on internet services provider GoDaddy
 GDDY.N  to $185 from $165
    ** New PT is a 17.3% premium to stock's close on Tuesday
    ** Co's clients are primarily small- and medium-scale
businesses that use GoDaddy services such as domain sales,
online presence tools and payments
    ** Brokerage says, assessing co's key segments shows gross
margin (GM) improvement opportunity if it can mix its shift
towards higher-margin productivity apps and website
subscriptions
    ** Nearly two-thirds of co's revenue in Applications &
Commerce segment comes from productivity apps - GoDaddy email
and sale of Microsoft 365 subscriptions - and at very high
SaaS-like margins, says Barclays
    ** Says, consistent growth in website subscriptions has the
potential to accelerate growth in its AI-powered solution Airo
    ** Estimates domain business is structurally lower-margin
and remains the gating factor for margin growth
    ** 10 of 18 brokerages rate the stock "buy" or higher, and
eight "hold"; their median PT is $172
    ** Stock is up 49% YTD, as of last close
         

 (Reporting by Savyata Mishra in Bengaluru)
 ((Savyata.Mishra@thomsonreuters.com))