GoDaddy is a publicly traded company that provides web hosting and domain registration services and it provides SSL certificates serving small businesses. The company was founded on February 8, 1997 in Baltimore, Maryland as Jomax Technologies and after two years of operations, it became GoDaddy Group Inc. Founded by Bob Parsons and headquartered in Scottsdale, Arizona and was incorporated and traded under NYSE:GDDY with more than 20,000 customers worldwide.
GoDaddy Inc A (GDDY) Extended Graph Analysis
1. GDDY CASH FLOW
|Net cash flow provided by operating activitIes||259,400,000||386,500,000||475,600,000||559,800,000||723,400,000||763,800,000|
|Net cash used for investing activities||-145,900,000||-183,400,000||-1,570,100,000||-254,800,000||-135,300,000||-243,400,000|
|Net cash provided by (used for) financing activities||95,700,000||15,100,000||1,107,500,000||47,000,000||-456,900,000||-945,500,000|
|Free cash flow||180,100,000||323,700,000||340,400,000||462,800,000||631,100,000||686,700,000|
- Net cash from operations was $763.8 million in the trailing twelve months.
- Net cash used for investing activities was -$243 million in the trailing twelve months.
- Cash provided by (used for) financing activities was -$946 million in the trailing twelve months.
- Capital expenditures were -$77 million in the trailing twelve months.
- Free cash flow was $687 million in the trailing twelve months.
- Working capital was -$426 million in the trailing twelve months.
- Cash from operations is increasing year-over-year and it grew 194 percent in 5 years.
- Cash used for investing activities were investment in property, plant and equipment, acquisitions, net, purchases of investments and intangible assets.
- Cash provided by (used for) financing activities were debt repayment and common stock repurchased.
- Capital expenditures were purchased of property, plant and equipment.
- Free cash flow increases year-over-year and has a growth of 281 percent in five years.
- Working capital was negative in the last five years due to current liabilities being higher than the current assets.
The management had managed to generate cash from operations and free cash flow in the last five years. However, the working capital was negative due to higher leveraged.
2. GDDY BALANCE SHEET
|Net property, plant and equipment||225,000,000||231,000,000||297,900,000||299,000,000||455,200,000|
|Total non-current assets||2,804,900,000||2,854,100,000||4,678,800,000||4,656,100,000||4,725,900,000|
- Total cash was $1.86 billion in 2019.
- Current assets were $1.575 billion in 2019.
- Net property, plant and equipment was $455 million in 2019.
- Non-current assets were $4.726 billion in 2019.
- Total assets were $6.301 in 2019.
- Current liabilities were $2 billion in 2019.
- Non-current liabilities were $3.5 billion in 2019.
- Total liabilities were $5.529 billion in 2019.
- Retained earnings were -$154 million in 2019.
- Stockholders equity was $772 million in 2019.
- Total cash increases year-over-year and has a growth of 208 percent in five years. And it represents 17 percent of the total assets.
- Current assets increase year-over-year and have growth of 127 percent in five years.
- Current assets represent 25 percent of total assets.
- Net property, plant and equipment increased year-over-year and has a growth of 68 percent in five years.
- Net property, plant and equipment represents 7 percent of the total assets.
- Total assets increased year-over-year and have grown 80 percent in five years.
- Current liabilities represent 36 percent of total liabilities.
- Non-current liabilities represent 64 percent of the total liabilities.
- Total liabilities was 88 percent of the total liabilities and stockholders equity.
- Retained earnings represent negative 20 percent of the total stockholders equity.
- Stockholders equity represents 20 percent of the total liabilities and the total stockholders equity.
The company is highly leveraged, the creditors have nearly 90 percent stake in the assets. Therefore cannot be considered the company has a sound balance sheet.
3. GDDY INCOME AND MARKET
- Revenue was $3 billion in the trailing twelve months.
- EBIT was -$383 million in the trailing twelve months.
- Net income was -$494 million in the trailing twelve months.
- EBITDA was -$215 million in the trailing twelve months.
- Market capitalization was $13 billion in the trailing twelve months.
- Intrinsic value was $40 billion in the trailing twelve months.
- Revenue growth in five years was 95 percent.
- EBIT was erratic in movement in the last five years and represented -12 percent of the total revenue.
- Net income was erratic in movement in the last five years and suffered a fall-off of 460 percent. Moreover, it represented -16 percent of the total revenue.
- EBITDA increases year-over-year from 2015 to 2019, however in the trailing twelve month 2020 it has a negative amount and suffered a downturn of 150 percent from 2019.
- Market capitalization increases year-over-year in the last five years and it grew 591 percent in five years.
- Intrinsic value increased year-over-year and grew 200 percent from 2019 to the trailing twelve months.
- Intrinsic value was higher than the market value by 208 percent in the trailing twelve months.
- The stock price of GoDaddy was undervalued.
Net income was unstable in the last five years and it suffered a negative bottomline in 2015, 2016 and the trailing twelve months. The company is not profitable. The market capitalization was undervalued in the trailing twelve months.
4. GDDY FINANCIAL RATIOS
|Asset turnover (average)||0.48||0.51||0.47||0.45||0.48||0.50|
|Return on assets %||-1.40||-0.45||2.86||1.30||2.21||-7.87|
|Return on equity %||-11.34||-3.34||26.01||12.05||17.51||-144.37|
|Return on invested capital %||1.31||1.15||8.22||4.87||6.19||-13.96|
- Asset turnover was 0.50 ratio in the trailing twelve months.
- Return on assets was -7.87 percent in the trailing twelve months.
- Return on equity was -144.37 percent in the trailing twelve months.
- Return on invested capital was -13.96 percent in the trailing twelve months.
- Debt/Equity ratio was 3.33 in the trailing twelve months.
- Asset turnover indicates that for every dollar invested in the asset, the company generated 50 cents of sales.
- Return on assets indicate that for every $1 invested in assets it generated a loss of -8 cents of loss in net income.
- Return on equity indicates that for every dollar invested in equity it generated a loss of 144 cents per share of net income.
- Return on invested capital indicates that the company generated a loss of 14 cents over its capital based.
- Debt/Equity ratio was high; it indicates that the company uses $3.33 in debt for every $1 of equity. The debt level is 333 percent in equity.
The financial ratios were not impressive, it shows that the management was not able to generate a positive return on the investment made in assets and equity. Moreover, investment in capital based suffered loss in the trailing twelve months.
5. GDDY KEY EXECUTIVE COMPENSATION
|Key Executive Compensation|
|Annual Other Income||0||0||0||0||0|
|Restricted Stock Award||0||8,119,203||3,463,685||27,821,430||34,058,153|
|Aman Bhutani, CEO|
|Annual Other Income||0|
|Restricted Stock Award||6,334,620|
|Scott W. Wagner/Former CEO|
|Annual Other Income||0||0||0||0||0|
|Restricted Stock Award||0||16,978||0||12,713,505||8,950,715|
|Ray E. Winborne/CFO|
|Annual Other Income||0||0||0||0|
|Restricted Stock Award||4,249,971||1,222,979||3,349,598||4,333,271|
|Ah Kee Andrew Low/COO|
|Annual Other Income||0||0|
|Restricted Stock Award||3,260,917||6,260,679|
James M. Carroll/Former President of International Independents Business
|Annual Other Income||0||0||0||0||0|
|Restricted Stock Award||0||1,663,464||628,774||2,122,717||543,105|
Nima J. Kelly/Chief Legal Officer, Executive ViP and Secretary
|Annual Other Income||0||0||0||0|
|Restricted Stock Award||2,188,790||1,611,932||6,374,693||2,835,760|
- Total key executive compensation in 2015 was $2,270,380.
- Total key executive compensation in 2016 was $18,097,456.
- Key executive compensation in 2017 was $8,325,078.
- Key executive compensation in 2018 was $40,182,705.
- Executive compensation in 2019 was $54,778,555.
- Total key executive compensation in 2019 represents 1.74 percent of the revenue.
- Key executive compensation of Aman Bhutani, CEO represents 26 percent of the total key executive compensation in 2019.
- Key executive compensation of Scott W. Wagner/Former CEO represents 25 percent of the total executive compensation in 2019.
- Executive compensation of Ray E. Winborne/CFO represents 12 percent of the total key executive compensation in 2019.
- Executive compensation of Ah Kee Andrew Low/COO represents 17 percent of the total key executive compensation in 2019.
- Compensation of James M. Carroll/Former President of International Independents Business represents 13 percent of the total compensation in 2019.
- Compensation of Nima J. Kelly/Chief Legal Officer, Executive ViP and Secretary represents 8 percent of the total executive compensation in 2019.
Total executive compensation includes salary, restricted stock award, securities options, non-equity compensation and other compensation.
6. GDDY LOBBYING AND CONTRIBUTIONS
The record shows that GoDaddy Inc was incurring lobbying and contributions expenditures from 2005 to 2013.
A note from OpenSecret.org Center for Responsive Politics, quoted below:
“NOTE: Figures on this page are calculations by the Center for Responsive Politics based on data from the Senate Office of Public Records. Data for the most recent year was downloaded on July 23, 2019 and includes spending from January 1 – June 30. Prior years include spending from January through December.”
Lobbying and contributions to politicians vary every cycle; it may increase or decrease in amount depending on the attention given by the federal government on the issues of the company.
7. GDDY FINANCIAL STRENGTH
|Market value of equity||$13,803,000,000|
|Book value of total liabilities||$5,529,200,000|
|A – Working Capital / Total Assets||-0.07||1.20||-0.08|
|B – Retained Earnings / Total Assets||-0.02||1.40||-0.03|
|C – EBIT / Total Assets||-0.06||3.30||-0.20|
|D – Market Value of Equity / Book Value of Total Liabilities||2.50||0.60||1.50|
|E – Sales / Total Assets||0.50||1.00||0.50|
Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E
Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.
The Z-Score of GoDaddy was calculated at 1.68 score. According to Dr. Edward Altman, this concept was adopted in business and finance to predict the likelihood of the company in getting into bankruptcy. The Altman grading scale of 0 – 1.8 indicates that the company will likely declare bankruptcy in the future. In other terms, it also indicates that the firm is gradually approaching insolvency and bankruptcy. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency. The financial health of GoDaddy is not favorable currently.
Research and written by Criselda