Can New Products & Expansion Aid GoDaddy (GDDY) Q1 Earnings?

GoDaddy Inc. GDDY is set to report first-quarter 2018 results on May 8.

In the last reported quarter, the company delivered in-line results, with an average four-quarter positive surprise of 120.1%.

The company's shares have gained 67.8% in the past 12 months, outperforming the industry’s growth of 40.7%.

 

Let's see how things are shaping up for this announcement.

GoDaddy generates revenues from three segments — Domain, Hosting and Presence, and Business Applications.

All the segments are expected to do well in the first quarter, driven by increasing investments in products, technology platform and strong customer growth. Also, the company is expanding internationally by investing in technology, marketing programs and customer service teams. Growing international expansion and the shift toward dynamic online presence for small businesses are likely to play an important role in the to-be-reported quarter.

In the last reported quarter, Business Applications revenues were $91.8 million, increasing 8.3% sequentially and 37.6% from the year-ago quarter. The Zacks Consensus Estimate for the quarter to be reported is pegged at $98.0 million.

Also, Domain revenues increased 3.7% sequentially and 16.1% year over yearin the fourth quarter. The Zacks Consensus Estimate for Domain revenues is pegged at $287 million.

Hosting and Presence revenues were $228.8 million in the fourth quarter, increasing 1.3% sequentially and 29.5% from the prior-year quarter. The Zacks Consensus Estimate is pegged at $237.0 million for the first quarter. The company made efforts to offer advanced but simplified solutions in a bid to expand its small business clientele, thereby expanding its Hosting and Presence revenues.

However, the company faces significant competition in domain, hosting and presence markets from companies like Endurance, Amazon and Google, among others. Moreover, heavy debt burden, high interest payments and other controversies surrounding the company could pose challenges in the to-be-reported quarter.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

GoDaddy has a Zacks Rank #3 and an Earnings ESP of -283.3%.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

 

GoDaddy Inc. Price and EPS Surprise

 

GoDaddy Inc. Price and EPS Surprise | GoDaddy Inc. Quote

 

Stocks to Consider

Each of the following companies have the right combination of elements to post an earnings beat in the quarter to be reported:

Solar Capital Ltd. SLRC has an Earnings ESP of +4.55% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Etsy, Inc. ETSY has an Earnings ESP of +10.00% and a Zacks Rank #2.

Trimble Inc. TRMB has an Earnings ESP of +2.39% and a Zacks Rank of 3.

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