TLDR
- GoDaddy (GDDY) shares plunged 16% on Wednesday, closing at $77.34 and becoming the S&P 500’s biggest loser.
- While Q4 EPS of $1.80 topped the $1.58 consensus, bookings of $1.28B fell short of the $1.31B estimate.
- 2026 full-year revenue outlook of $5.195B–$5.275B disappointed investors expecting higher growth.
- Growth in Applications & Commerce bookings slowed from 14% to 11% following promotional pricing changes.
- Analysts across Wall Street reduced price targets, including RBC’s dramatic cut from $200 to $100 and JPMorgan’s reduction from $200 to $167.
GoDaddy $GDDY experienced a brutal trading session on Wednesday. Shares collapsed 16% to close at $77.34 following the company’s fourth-quarter earnings release — claiming the unfortunate title of the S&P 500’s worst-performing stock that day.
According to Dow Jones Market Data, this decline represents the steepest single-day percentage loss for the stock since March 2020. The closing price also marks GDDY’s lowest level since November 2023.
Year-to-date, GoDaddy shares have tumbled approximately 26%, contrasting sharply with the broader market’s modest 0.6% gain.
The earnings report wasn’t entirely negative. GoDaddy delivered Q4 EPS of $1.80, surpassing the analyst consensus of $1.58. Revenue reached $1.27 billion, matching Wall Street’s projections.
But what triggered the selloff? Two critical factors: bookings performance and forward guidance.
Q4 bookings totaled $1.28 billion, falling short of the $1.31 billion analyst estimate. The Applications and Commerce segment experienced a deceleration, with bookings growth dropping from 14% in Q3 to just 11% in Q4.
The company had implemented a revised go-to-market approach featuring promotional pricing on one-year contracts designed to attract fresh customers. This strategy resulted in reduced near-term bookings.
While GoDaddy successfully added 9,000 new customers during the quarter—more than double the 4,000 added in Q3—analysts raised concerns about sustainability. RBC observed that new cohort attachment rates appeared comparable to or weaker than historical averages.
Guidance Disappoints
For the full 2026 fiscal year, GoDaddy projected revenue between $5.195 billion and $5.275 billion, implying roughly 6% growth at the midpoint. Wall Street had anticipated $5.246 billion—exceeding the company’s midpoint estimate.
Free cash flow projections came in approximately 3% above Street expectations, with GoDaddy generating $1.54 billion in levered free cash flow over the trailing twelve months.
Benchmark analyst Mark Zgutowicz highlighted that management didn’t quantify the new go-to-market strategy’s specific impact on the A&C segment. He anticipates continued bookings pressure in the immediate term due to the transition toward shorter contract terms and smaller initial orders stemming from discount pricing.
He also projected that the bookings-revenue gap should compress throughout 2026, nearing equilibrium by year-end as transaction volume increases.
Analysts Cut Price Targets
Wall Street’s response was immediate and severe. RBC Capital dramatically reduced its price target from $200 to $100, pointing to weak bookings momentum and what the firm described as a “more realistic AI-discounted multiple.” The firm maintained its existing rating.
JPMorgan lowered its target from $200 to $167 while preserving an Overweight rating. Analyst Alexei Gogolev acknowledged the company is accelerating its AI transformation while navigating short-term go-to-market challenges.
UBS reduced its target to $105, Cantor Fitzgerald to $90, and Barclays to $118—all while keeping Neutral or Overweight ratings intact.
The AI narrative poses a genuine concern. Analysts have highlighted that GoDaddy may be lagging behind rivals like Wix.com and Squarespace in implementing AI capabilities. RBC suggested the results would validate bearish perspectives on AI’s disruptive impact on traditional web design platforms.
Cantor Fitzgerald previously suggested GoDaddy consider going private as a potential solution to escape public market scrutiny.
GDDY stock currently hovers near its 52-week low of $86.78, down roughly 47% over the past twelve months.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
