GoDaddy Stock Plummets 13% Despite Revenue Growth

GoDaddy shares drop after the company falls short on EPS expectations. Despite a year-over-year revenue growth of 8%, the lower-than-expected earnings per share led to a significant stock decline. Analysts suggest caution moving forward.

Date: 14-02-2025

AI Rating: 5

Overview of GoDaddy's Earnings Report

GoDaddy's recent financial report for Q4 2024 revealed a revenue growth of 8% to $1.2 billion, surpassing the company's forecast of 7%. However, the stock fell by about 13% due to disappointing earnings per share (EPS) of $6.45, which fell short of investor expectations.

Earnings Per Share (EPS)

The significant decline in EPS year over year raises concerns for investors. It is noted that the previous year's figures were boosted by a tax benefit, meaning the current EPS did not meet investor expectations, leading to a negative market reaction.

Revenue Growth

Despite the EPS setback, GoDaddy achieved a commendable revenue growth of 8%, exceeding its forecasts. This positive trend may provide some reassurance to investors looking for growth potential.

Free Cash Flow (FCF)

For 2025, GoDaddy expects to generate about $1.5 billion in free cash flow, indicating a robust cash position that might support further investments and growth strategies.

Market Reaction

The combination of solid revenue growth but disappointing EPS led to a notable stock decline. The report indicates that heightened investor expectations regarding the company's growth and profitability were not met, resulting in a significant market adjustment. While current valuations may appear reasonable, the inability to meet EPS projections is a red flag for investors.

Conclusion

Overall, while GoDaddy continues to show revenue growth, the lack of alignment between expectations and EPS figures has negatively impacted investor sentiment, leading to stock price volatility.

Stocks: GDDY