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GoDaddy Inc A (GDDY) Extended Graph Analysis

August 22nd, 2020 Posted by Extended Analysis No Comment yet

Company Profile

GoDaddy logo

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

GDDY CASH FLOW

2015 2016 2017 2018 2019 2020
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
Capital expenditure -79,300,000 -62,800,000 -135,200,000 -97,000,000 -92,300,000 -77,100,000
Free cash flow 180,100,000 323,700,000 340,400,000 462,800,000 631,100,000 686,700,000
Working Capital -419,000,000 -329,000,000 -751,000,000 -458,000,000 -426,000,000 -426,000,000

Facts:

  • 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.

Explanation

  • 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.

Interpretation

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

GDDY BALANCE SHEET

2015 2016 2017 2018 2019
Total cash 352,500,000 572,700,000 595,000,000 951,300,000 1,086,400,000
Current Assets 693,900,000 932,800,000 1,059,500,000 1,427,300,000 1,575,300,000
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 assets 3,498,800,000 3,786,900,000 5,738,300,000 6,083,400,000 6,301,200,000
Current liabilities 1,113,600,000 1,262,200,000 1,810,700,000 1,886,200,000 2,001,100,000
Non-current liabilities 1,959,400,000 1,962,200,000 3,441,100,000 3,004,500,000 3,528,100,000
Total liabilities 3,073,000,000 3,224,400,000 5,251,800,000 5,290,700,000 5,529,200,000
Retained earnings -32,200,000 -48,700,000 87,700,000 164,800,000 -153,500,000
Stockholders equity 425,800,000 562,500,000 486,500,000 792,700,000 772,000,000

Facts:

  • 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.

Explanation

  • 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.

Interpretation

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

GDDY INCOME AND MARKET

2015 2016 2017 2018 2019 2020
Revenue 1,607,300,000 1,847,900,000 2,231,900,000 2,660,100,000 2,988,100,000 3,139,300,000
EBIT -31,000,000 37,600,000 190,100,000 164,500,000 211,300,000 -383,100,000
Net Income -75,600,000 -16,500,000 136,400,000 77,100,000 137,000,000 -493,600,000
EBITDA 107,400,000 195,800,000 395,600,000 405,500,000 428,200,000 -215,400,000
Market Capitalization 1,891,540,000 5,804,000,000 8,383,000,000 11,471,000,000 11,842,000,000 13,078,380,000
Intrinsic Value 135,669,000 266,465,000 4,561,428,000 7,868,897,000 13,432,301,000 40,266,376,000

Facts:

  • 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.

Explanation

  • 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.

Interpretation

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

GDDY FINANCIAL RATIOS

2015 2016 2017 2018 2019 2020
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
Debt/Equity 2.44 1.84 4.96 3.02 3.33 3.33

Facts:

  • 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.

Explanation

  • 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.

Interpretation

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

GDDY KEY EXECUTIVE COMPENSATION

2015 2016 2017 2018 2019
Key Executive Compensation
Salary 1,264,538 1,892,358 2,265,000 2,713,077 2,883,335
Bonus 0 45,000 0 0 1,000,000
Annual Other Income 0 0 0 0 0
Restricted Stock Award 0 8,119,203 3,463,685 27,821,430 34,058,153
Securities Options 0 6,548,894 624,410 7,481,483 14,433,563
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 995,460 1,367,010 1,759,000 2,129,000 2,364,400
Other Compensation 10,382 124,991 212,983 37,715 39,104
Total 2,270,380 18,097,456 8,325,078 40,182,705 54,778,555
Aman Bhutani, CEO
Salary 326,027
Bonus 1,000,000
Annual Other Income 0
Restricted Stock Award 6,334,620
Securities Options 6,332,801
LTIP Payout 0
Non-Equity Compensation 315,595
Other Compensation 1,538
Total 14,310,581
Scott W. Wagner/Former CEO
Salary 750,000 750,000 750,000 750,000 542,308
Bonus 0 0 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 0 16,978 0 12,713,505 8,950,715
Securities Options 0 0 0 3,177,964 3,600,324
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 705,000 597,600 750,000 750,000 491,293
Other Compensation 5,382 5,750 5,000 7,500 7,500
Total 1,460,382 1,370,328 1,505,000 17,398,969 13,592,143
Ray E. Winborne/CFO
Salary 192,308 500,000 500,000 500,000
Bonus 45,000 0 0 0
Annual Other Income 0 0 0 0
Restricted Stock Award 4,249,971 1,222,979 3,349,598 4,333,271
Securities Options 4,249,995 0 1,122,658 1,260,128
LTIP Payout 0 0 0 0
Non-Equity Compensation 249,000 400,000 500,000 484,000
Other Compensation 108,460 192,798 7,571 7,500
Total 9,094,734 2,315,777 5,479,827 6,584,899
Ah Kee Andrew Low/COO
Salary 448,077 500,000
Bonus 0 0
Annual Other Income 0 0
Restricted Stock Award 3,260,917 6,260,679
Securities Options 2,245,316 1,800,175
LTIP Payout 0 0
Non-Equity Compensation 270,000 484,000
Other Compensation 7,500 7,500
Total 6,231,810 9,052,354
James M. Carroll/Former President of International Independents Business
Salary 514,538 515,000 515,000 515,000 515,000
Bonus 0 0 0 0 0
Annual Other Income 0 0 0 0 0
Restricted Stock Award 0 1,663,464 628,774 2,122,717 543,105
Securities Options 0 1,649,231 624,410 935,454 900,088
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 290,460 256,470 309,000 309,000 29,912
Other Compensation 5,000 5,599 5,086 7,500 7,500
Total 809,998 4,089,764 2,082,270 3,889,762 7,064,805
Nima J. Kelly/Chief Legal Officer, Executive ViP and Secretary
Salary 435,050 500,000 500,000 500,000
Bonus 0 0 0 0
Annual Other Income 0 0 0 0
Restricted Stock Award 2,188,790 1,611,932 6,374,693 2,835,760
Securities Options 649,668 0 0 540,047
LTIP Payout 0 0 0 0
Non-Equity Compensation 263,940 300,000 300,000 290,400
Other Compensation 5,182 10,099 7,644 7,566
Total 3,542,630 2,422,031 7,182,337 4,173,773

Facts

  • 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.

Explanation

  • 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.

Interpretation

Total executive compensation includes salary, restricted stock award, securities options, non-equity compensation and other compensation.

6. GDDY LOBBYING AND CONTRIBUTIONS

GDDY LOBBYING AND CONTRIBUTIONS

PERIOD AMOUNT
2005 $20,000
2006 $460,000
2007 $580,000
2008 $638,000
2009 $715,500
2010 $802,000
2011 $1,224,500
2012 $746,250
2013 $377,000

Facts:

The record shows that GoDaddy Inc  was incurring lobbying and contributions expenditures from 2005 to 2013.

Explanation

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.”

Interpretation

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

GDDY FINANCIAL STRENGTH

DATA

Working Capital -$426,000,000
Total Assets $6,301,200,000
Sales $3,139,300,000
EBIT -$383,100,000
Market value of equity $13,803,000,000
Book value of total liabilities $5,529,200,000
Retained earnings -$153,500,000

CALCULATIONS

Ratio Score Result
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
Z-Score     1.68


Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E

Explanation:

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.

Interpretation

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.

CITATION

https://www.morningstar.com/stocks/xnys/gddy/quote

https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001609711&type=&dateb=&owner=include&start=0&count=40

https://www.opensecrets.org/federal-lobbying/firms/summary?cycle=2013&id=D000026241

Research and written by Criselda

Note:

Research Reports can be found under the company tab.