GoDaddy Inc. (GDDY) DCF Valuation & Fundamental Primer
GoDaddy Inc. (GDDY) currently trades at $118.59 with an enterprise value of $22.02B. Our proprietary institutional model rates GoDaddy Inc. at 66/100 (Grade: B+ · Quality Software Operator). The current market price prices in an implied 5-year revenue CAGR of 5.2% vs. historical growth of 8.4% (Fairly Priced to Fundamentals).
Institutional fundamental teardown of GoDaddy Inc. (GDDY) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
GoDaddy Inc. (GDDY) 3-Scenario DCF Valuation Range
Stress-test GDDY's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $118.59).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $155.53 +31% | $166.27 +40% | $178.79 +51% | $193.59 +63% | $211.35 +78% |
| 9.3% | $137.99 +16% | $146.45 +23% | $156.15 +32% | $167.42 +41% | $180.64 +52% |
| 10.0% | $123.55 +4% | $130.35 +10% | $138.06 +16% | $146.86 +24% | $157.02 +32% |
| 10.8% | $111.47 -6% | $117.03 -1% | $123.26 +4% | $130.30 +10% | $138.31 +17% |
| 11.5% | $101.21 -15% | $105.82 -11% | $110.94 -6% | $116.67 -2% | $123.11 +4% |
Institutional Software Quality Scorecard (66/100 · Grade B+)
Solid software model with clear operating leverage, partially offset by standard SBC or moderate burn.
Elite deferred revenue float; FCF exceeds operating income by >20%
Disciplined equity compensation well below software industry average
Sub-par gross margins; higher cost of delivery or hardware/services mix
Moderate leverage or cash burn; monitor liquidity runway
Core Investment Strengths & Moats
- High-grade cash conversion: FCF is 141% of EBIT driven by upfront annual collections
Key Operational & Dilution Risks
- Lower software gross margins (63.9%), indicating higher hosting or service delivery drag
Reverse-DCF Solver: What Growth is Priced Into GDDY?
Market implies 5.2% annual revenue growth over next 5 years (9.1% dilution-adjusted), in line with company run-rate.
Headline Reverse-DCF ignores Stock-Based Compensation (6.6% of revenue) and annual share dilution (0.8%/yr). Accounting for both requires 9.1% 5-year revenue CAGR to justify $118.59/sh on a true per-share economic cash flow basis.
GoDaddy Inc. (GDDY) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $4.57B | $4.57B | $4.96B | $5.37B | $5.82B | $6.31B | $6.83B |
| Gross Profit | $2.92B | $2.92B | $3.17B | $3.43B | $3.72B | $4.03B | $4.36B |
| Operating Income (EBIT) | $893.5M | $893.6M | $968.3M | $1.05B | $1.14B | $1.23B | $1.34B |
| Stock-Based Compensation (SBC) | $299.9M | $300.0M | $325.1M | $352.3M | $381.7M | $413.6M | $448.2M |
| Unlevered Free Cash Flow (FCF) | $1.26B | $1.26B | $1.37B | $1.48B | $1.60B | $1.74B | $1.88B |
| SBC-Adjusted True Cash Flow | $961.2M | $961.3M | $1.04B | $1.13B | $1.22B | $1.33B | $1.44B |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -21.6 + 0.66 × (Rule of 40) · R² = 79%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| GoDaddy Inc. | GDDY | $16.55B | $4.57B | 63.9% | 27.6% | 35.9% | 6.6% | 4.2× |
| ServiceNow | NOW | $152.61B | $10.98B | 79.2% | 31.1% | 54.2% | 15.9% | 13.9× |
| Workday, Inc. | WDAY | $50.35B | $8.00B | 75.0% | 27.4% | 43.9% | 19.0% | 6.4× |
| Salesforce | CRM | $217.10B | $37.90B | 77.2% | 32.8% | 42.8% | 8.4% | 5.8× |
| Datadog | DDOG | $46.05B | $2.68B | 80.8% | 31.1% | 57.7% | 21.3% | 17.4× |
| Snowflake Inc. | SNOW | $71.79B | $3.63B | 66.5% | 25.2% | 57.7% | 40.8% | 20.0× |
| Hubspot | HUBS | $19.89B | $2.63B | 85.0% | 21.3% | 52.7% | 19.2% | 7.7× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 29.2% | 53.5% | 19.1% | 10.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 4.2× | $19.36B | $16.55B | $118.59 | 0.0% |
| -20% Multiple Compression | 3.4× | $15.48B | $12.68B | $90.85 | -20.0% |
| -35% Multiple Compression | 2.8× | $12.58B | $9.78B | $70.05 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $22.87B | $20.06B | $143.74 | +18.1% |
Frequently Asked Questions: GoDaddy Inc. (GDDY) Valuation
What is GoDaddy Inc. (GDDY)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, GoDaddy Inc. (GDDY) has a Base Case implied value of $137.68 per share (with a Bear Case of $65.53 and a Bull Case of $222.20), compared to its current price of $118.59. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is GoDaddy Inc. (GDDY)'s Rule of 40 score and Free Cash Flow margin?
GoDaddy Inc. achieves a Rule of 40 score of 35.9%, combining a 8.4% revenue growth run-rate with a 27.6% TTM free cash flow margin on $4.57B in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.
What revenue growth rate is priced into GDDY stock according to Reverse-DCF analysis?
At $118.59 per share (Enterprise Value of $19.36B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 5.2%, compared to GoDaddy Inc.'s historical CAGR of 8.4%. Overall market expectations are rated as "Fairly Priced to Fundamentals".
How does GoDaddy Inc. compare to Software & Cloud Services software peers?
GoDaddy Inc. (GDDY) earns an institutional Software Quality Score of 66/100 (Grade B+ — Quality Software Operator). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact GoDaddy Inc. (GDDY)'s valuation?
GoDaddy Inc. recorded $299.9M in TTM stock-based compensation (6.6% of revenue). When treating SBC as a cash-equivalent compensation expense, GoDaddy Inc.'s SBC-adjusted free cash flow yield is 5.8%, scoring 21/25 on our Shareholder Dilution Friction pillar.