RBC Capital Markets lowered its price target on GoDaddy Inc (NYSE:GDDY) to $100 from $200 on Tuesday but kept its recommendation unchanged. The firm said the revision reflects what it described as a "more realistic AI-discounted multiple" amid concerns over how artificial intelligence could affect demand for conventional web design builders.
GoDaddy shares traded at $77.69 at the time of the report, placing the stock down 47% over the past year and close to a 52-week low of $86.78. InvestingPro analysis cited in the company briefing suggested the shares could be undervalued at current levels.
Quarterly performance and bookings details
The analyst action followed GoDaddy’s fourth-quarter results, where bookings growth came in below expectations. Specifically, Applications and Commerce bookings decelerated to 11% growth from 14% in the third quarter. RBC attributed part of the slowdown to promotional activity that brought in new customers on upfront discounts and one-year contracts rather than multi-year deals, which weighed on reported bookings.
During the quarter GoDaddy added 9,000 customers, up from 4,000 in the prior quarter. Despite the bookings softness, the company reported revenue of $1.3 billion for the quarter, a 6.8% increase year-over-year, and adjusted earnings per share of $1.80, ahead of the analyst consensus of $1.58.
Guidance, cash flow and cohort metrics
GoDaddy’s fiscal 2026 revenue guidance ranges from $5.19 billion to $5.28 billion, a target that analysts said fell short of Wall Street expectations. RBC noted questions about whether the new customer growth is sustainable, pointing to the company’s emphasis on high-intent customers and the observation that new cohort attachment rates appeared in-line with or worse than average. Those cohort dynamics contributed to skepticism about the strength of the company’s revenue ramp in the back half of the year.
On free cash flow, GoDaddy provided guidance that came in 3% ahead of Street estimates. The company generated $1.54 billion in levered free cash flow over the trailing twelve months, a figure the report translated to a 13% free cash flow yield.
Market reaction and analyst responses
Other brokerages also adjusted their GoDaddy targets after the earnings and guidance. UBS moved its target to $105, Cantor Fitzgerald to $90 and Barclays to $118, while those firms retained Neutral or Overweight ratings. Analysts flagged a deceleration in bookings growth to 5% year-over-year in some measures, noting the role of new marketing strategies. Even though GoDaddy beat revenue and adjusted EBITDA estimates for the quarter, the company’s guidance prompted concern about its ability to sustain growth; Barclays underscored that the guidance implies a growth rate below 7%.
RBC also suggested that the results strengthen bearish views about AI’s impact on the sector and signaled a potential negative read-through to competitors such as WIX.
Where to find deeper analysis
For investors seeking further detail on valuation and growth assumptions, the company briefing referenced an InvestingPro Pro Research Report and additional ProTips available to subscribers.
Summary: RBC cut GoDaddy’s price target to $100 on weaker bookings growth, customer economics that reflect short-term promotional activity, conservative fiscal 2026 guidance and potential AI-driven disruption to traditional web design tools. The stock’s recent trading level and strong free cash flow metrics were also highlighted in analyst commentary.