GoDaddy Inc.GDDYNYSE

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DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $197.06 per share(market-calibrated)

+120.8%

Upside to Fair Value

Current

$89.23

Pure Model

$216.23

Fair Value

$197.06

Bull Case

$286.30

Bear Case

$161.80

Market Reality Check

Model Terminal Growth

3.75%

Market-Implied Growth

0.50%

Calibrated Growth

2.61%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $216.23.

What's Driving This Ratingfor GDDY

✓

CapEx already efficient

CapEx at 1.78% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

↑

Margin expansion modeled

Current EBIT margin is 15.62% — below the sector mature average of 25.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $1.7B (21.93% margin).

→

Moderate revenue growth

Analyst consensus projects 5.77% revenue growth, fading to 3.75% by Year 10. Revenue reaches $7.9B (vs $5.0B today).

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 325bps below the model's 3.75%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 85.79% indicates efficient cash generation. FCF reaches $1.7B by Year 10 (21.64% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)0.98

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)8.91%

Cost of Debt

Pre-tax Cost of Debt3.90%

Tax Rate6.58%

After-tax Cost of Debt3.64%

Equity Weight (E/V)75.58%

Debt Weight (D/V)24.42%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (75.58% × 8.91%) + (24.42% × 3.64%)

= 7.62%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$5.2B	$5.9B	$6.4B	$7.0B	$7.9B
EBIT	$818M	$925M	$1.0B	$1.3B	$1.7B
Tax	$54M	$61M	$66M	$88M	$114M
NOPAT	$764M	$864M	$941M	$1.3B	$1.6B
+ Depreciation	$173M	$195M	$213M	$233M	$261M
- Capex	$93M	$105M	$115M	$126M	$141M
- Δ NWC	$29M	$38M	$30M	$30M	$29M
Free Cash Flow	$815M	$916M	$1.0B	$1.3B	$1.7B
Discount Factor	0.929	0.802	0.693	0.598	0.480
Present Value	$758M	$735M	$699M	$794M	$822M

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$1.7B

Terminal Growth Rate3.75%

WACC7.62%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$45.9B

PV of Terminal Value$22.0B

Exit Multiple Method

Year 10 EBITDA$2.0B

Exit Multiple (EV/EBITDA)28.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$55.9B

PV of Terminal Value$26.8B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$7.7B

PV of Terminal Value$22.0B

Enterprise Value$29.7B

(-) Net Debt$2.8B

Equity Value$26.9B

Shares Outstanding135M

Price per Share$198.54

Exit Multiple Method

PV of Projected FCFs$7.7B

PV of Terminal Value$26.8B

Enterprise Value$34.5B

(-) Net Debt$2.8B

Equity Value$31.7B

Shares Outstanding135M

Price per Share$233.93

Pure Model Fair Value

$216.23

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.75%	3.25%	3.75%	4.25%	4.75%
5.62%	$292.78	$321.22	$347.41	$332.51	$318.31
6.62%	$236.10	$249.72	$268.09	$294.21	$318.31
7.62%	$198.90	$206.57	$216.23	$228.76	$245.65
8.62%	$171.69	$176.46	$182.21	$189.27	$198.16
9.62%	$150.47	$153.63	$157.33	$161.72	$167.01

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$161.80

81.3% vs current

• -25% vs analyst consensus
• Terminal growth: 3.3%
• Beta: 1.22

Base Case

$216.23

142.3% vs current

• Analyst consensus
• Terminal growth: 3.8%
• Beta: 0.98

Bull Case

$286.30

220.9% vs current

• +25% vs analyst consensus
• Terminal growth: 4.3%
• Beta: 0.83

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Technology Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth5.77%

Year 3 Revenue Growth6.80%

Year 5 Revenue Growth4.86%

Year 7 Revenue Growth4.42%

Year 10 Revenue Growth3.75%

Terminal Growth Rate3.75%

Margin & Efficiency

Current EBIT Margin15.62%

Terminal EBIT Margin25.00%

Tax Rate6.58%

Historical Capex / Rev1.78%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 28x EV/EBITDA (Technology sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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