When single-digit growth is the norm, there’s no room for even slightly disappointing guidance.
Just when it seems like its stock can’t possibly sink any more than it already has, GoDaddy (GDDY 15.63%) finds a way. As of 11:42 a.m. ET today, shares of the website-host and domain registrar are down another 15.9%, dragging them to a two-year low that’s 65% below their early 2025 peak.
Blame earnings… sort of. While its reported fiscal Q4 numbers topped analysts’ estimates, revenue guidance for the quarter now underway was disappointing.
In some ways, however, today’s sizable stumble could also mark the stock’s long-awaited bottom.
Decent quarter, disappointing guidance
GoDaddy turned nearly $1.3 billion worth of revenue into per-share profits of $1.80 during the three months ending in December, up from year-earlier comparisons of less than $1.2 billion and $1.36 per share. Better still, while the top line was in-line with estimates, analysts were only calling for per-share earnings of $1.58.
Wednesday’s stumbling block, rather, was the company’s outlook for the first quarter of 2026. GoDaddy says it’s looking for revenue of around $1.26 billion, up 6% year-over-year, but shy of analysts’ consensus projection of $1.28 billion. Its full-year top-line outlook also fell short of analysts’ estimates. Given that fourth-quarter bookings growth of only 5% was slower than reported revenue growth (the former precedes the latter), there’s no room for even this slight guidance shortfall.
Image source: Getty Images.
As has been the case with so many other stocks’ recent setbacks, artificial intelligence gets at least some of the blame for this one. While GoDaddy is embracing the technology by offering AI-powered tools to its own customers, artificial intelligence is also empowering rivals like Wix (WIX 2.81%). At the same time, it doesn’t help that GDDY shares soared in 2024 in anticipation of a degree of growth that was never actually going to materialize.
Max pessimism
After a year’s worth of poor performance, it’s no surprise that the market has soured on this stock; Barclays, Jefferies, and RBC Capital Markets are just some of the analytical firms that recently dialed back their bullishness on GoDaddy.
Today’s Change
(-15.63%) $-14.43
Current Price
$77.87
Key Data Points
Market Cap
$12B
Day’s Range
$73.10 – $79.80
52wk Range
$73.10 – $193.55
Volume
442K
Avg Vol
1.6M
Gross Margin
59.66%
There’s a case to be made, however, that today’s uncharacteristically big dip against a backdrop of so much pessimism marks the long downtrend’s bottom… the “can’t get any worse” moment that only becomes obvious after the fact. Bolstering this bullish argument is the fact that with today’s setback, GoDaddy shares are finally back to where they were right before they began their exaggerated rally in late-2023.
Just tread lightly if that’s what you’re thinking. Bottom or not, there’s certainly still some lingering volatility that will need to be worked out.
James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Jefferies Financial Group and Wix.com. The Motley Fool recommends Barclays Plc and GoDaddy. The Motley Fool has a disclosure policy.