GoDaddy (NYSE:GDDY) shares dropped about 9% after the company issued fiscal 2026 revenue guidance that fell short of market expectations, weighing on investor sentiment.
The web infrastructure provider forecast total revenue for fiscal 2026 in a range of $5.19 billion to $5.28 billion. Analysts at Barclays said the outlook implies growth slowing to below 7%, adding that this “will be tough for bulls to defend in this market backdrop, even if bookings should accelerate as the year progresses off a first quarter low point.”
William Blair analysts highlighted valuation and strategic developments, noting that “GoDaddy is trading at 7 times our 2027FCF estimate based on the aftermarket price of $84.70. GoDaddy continues to make progress on Airo/Airo.ai and pricing and packaging (though the latter was not a focus of yesterday’s earnings results). As A&C segment revenue mix continues to increase, this should help drive margins higher as well given the more favorable margin profile of this segment. The market has clearly bucketed GoDaddy into the high-risk category of the AI trade as competition intensifies in the website building market (this is still a small portion of GoDaddy’s current revenue but a significant future growth opportunity). To gain comfort with GoDaddy’s positioning and right to win, investors are likely looking for compelling adoption data as it relates to the Airo AI family, and ultimately want to see an A&C growth acceleration. This quarter was a step back on that front, and until the adoption data becomes clearer to investors, shares are likely to be range-bound. Still, we remain optimistic on the Airo.ai launch later this year.”
Barclays added that despite “a few bright spots,” it expects downward revisions to forecasts and sees “a tougher path for shares to work near-term.”