GoDaddy (GDDY) shares are 'under-owned' - RBC Capital

RBC Capital upgraded shares of GoDaddy (NYSE: GDDY) to Outperform from Sector Perform in a note Wednesday, raising the price target to $124 per share, up from $90.

Analyst Brad Erickson told investors that the company is "structurally differentiated" and under-owned.

"GDDY's an under-owned, durably growing cash machine with a dash of AI," wrote Erickson. "We like its structurally hedged customer acquisition model, have rising confidence in margin expansion coming out of our conference and lastly, like management's openness to increasingly managing top-line expectations."

The analyst also noted that the company's generative AI-focused dinner next week is timely, while the mid-Q1 analyst day should improve visibility into the company's strong long-term earnings and free cash flow generation.

"The stock could be viewed as trading at mid-single digit multiple on very reachable longer-term assumptions," added the analyst.

By Sam Boughedda

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