GoDaddy Inc. (GDDY) stock intrinsic value fair value estimate & owner earnings analysis

GoDaddy sells domain names, website hosting, website-building tools, commerce and payments software, and security and email products to small businesses and individuals. Customers pay up front for annual or multi-year terms, which is why the company carried $3.3 billion of deferred revenue at the end of 2025. In 2025 revenue was $4.95 billion: domains $2.31 billion (growing about 7% a year), applications and commerce $1.89 billion (growing 14% to 16% a year), and other core platform products $0.75 billion (shrinking slightly). About 67% of revenue is from U.S. customers and no single customer is over 10% of revenue. How we measure earnings. We start from operating cash flow and deduct three things: the cash benefit from changes in working capital (mostly growth in prepaid customer payments, which is timing rather than earnings), stock compensation ($318 million in 2025, a real cost paid in shares), and the part of capital spending needed just to keep the business running (only about $17 million in 2025; GoDaddy spends very little on equipment). Owner earnings per share on this basis were about $0.56 in 2017, $2.28 in 2020, $3.84 in 2023, $6.24 in 2024 and $8.26 in 2025. Share count fell from about 177 million in 2017 to about 141 million as GoDaddy spent $1.6 billion on buybacks in 2025. The jump from 2023 to 2025 reflects a real rise in profits (pre-tax income went from $404 million to $765 million to $1,020 million while revenue grew 4% to 8% a year), and operating cash flow less working capital reconciles exactly to net income plus non-cash items. Purchases of intangible assets, including $202 million in 2021, were treated as acquisitions, not upkeep. Starting level. We used the median of 2023 to 2025, about $6.24 per share (roughly $880 million), instead of the 2025 figure of $8.26, because 2025 rose 32% (about 28% in total dollars) and we want the level to be confirmed by more than one year. Year 1 of the base case assumes 4% growth, below the 2025 rate. The tax shield is the main thing to understand. GoDaddy paid only $16.5 million of cash income taxes in 2025 (and $19.1 million in 2024, $10.6 million in 2023) on $1.02 billion of pre-tax income, because it holds deferred tax assets of about $1.05 billion, including $571 million from tax losses and $243 million of tax credits. A profitable company of this size would otherwise pay on the order of $150 to $200 million a year. We assume that shield lasts about three years and that cash taxes then run at roughly 17% of pre-tax earnings, which lowers owner earnings by roughly $0.9 to $1.2 per share from year 4. This is a specific, disclosed feature of the company's balance sheet and is charged in all three cases. Base case, about $88 per share. Owner earnings grow 4% a year for five years, then 2% a year for five years, then hold flat for a further 15 years, with the tax step-up beginning in year 4. Growth credited: GoDaddy has grown revenue every year from 2016 to 2025 (its slowest year, 2023, was still +4.0%), with renewals of prepaid domains and hosting providing the base. We did not credit the faster growth in applications and commerce, margin expansion, or any market expansion because those depend on things that have not been proven through a full cycle. Beyond year 10 we assume no growth and stop counting value after 25 years, since we cannot name what keeps earning power going beyond that. Bear case, about $33 per share. Earnings fall back to the 2023 level of about $3.84 per share (a level the business actually produced two years earlier), with no growth, the tax shield ends after year 3, and earnings stop after year 15. The company carries $3.8 billion of debt (interest already counted in cash flow), and the smallest product group has already been shrinking (from $805 million in 2023 to $752 million in 2025). Bull case, about $140 per share. Owner earnings start from the 2025 level of $8.26 per share and grow 7% a year for five years (below the 7.5% to 8.3% revenue growth of 2024 and 2025), 4% a year for the next five, then hold flat through year 25, with the same tax step-up. This assumes the applications and commerce business keeps compounding at recent rates. What would make this wrong. If cash taxes start sooner than assumed, or if domain and hosting renewals weaken, value falls toward the bear case. If profit margins keep rising as they did from 2023 to 2025, value rises toward the bull case. We could not independently confirm how much of the shield is usable each year; the estimate of about three years is based on the disclosed tax-loss and credit balances relative to annual pre-tax income. Owner earnings for 2016 and earlier are not shown because the share count in those years is not comparable.