Why GoDaddy Stock Crashed Today

Core Viewpoint - GoDaddy's stock experienced a significant decline following the release of its Q4 2024 financial results, despite reporting revenue growth that exceeded expectations [1][2]. Financial Performance - For Q4 2024, GoDaddy's revenue grew by 8% year over year to $1.2 billion, surpassing the expected growth of 7$6.45, which was a decline from the previous year, primarily due to a substantial tax benefit in 2023 that inflated profits [3]. - Analysts had anticipated a slightly higher EPS, contributing to the negative market reaction [3]. Stock Valuation - Over the past year, GoDaddy's stock has increased by 62%, while its price-to-sales (P/S) valuation rose by 48%, indicating that the stock's gains were largely driven by heightened investor expectations [4]. - Following the unmet expectations, the stock price experienced a crash, reflecting a recalibration of investor sentiment [4]. Future Outlook - Management projects a free cash flow of approximately $1.5 billion for 2025, suggesting a valuation of about 17 times those expectations, which is considered reasonable if the company can sustain growth [5]. - GoDaddy anticipates achieving annual top-line growth of 6% to 8% over the next few years, alongside improvements in profitability, which are viewed as achievable given the company's market position [6].