GoDaddy Inc. GDDY is set to report third-quarter 2017 results on Nov 6.
Last quarter, the company delivered a positive earnings surprise of 333.33%, with an average four-quarter positive surprise of 137.50%.
The company's shares have gained only 34.0% year to date, outperforming the industry’s growth of 22.8%.
Let's see how things are shaping up for this announcement.
GoDaddy generates revenues from three segments — Domain, Hosting and Presence, and Business Applications.
All the segments are expected to do well in the third quarter, driven by increasing investments in products, technology platform and strong growth in customers. Also, the company is expanding internationally by investing in technology, marketing programs and customer care teams. Growing international presence and the shift toward dynamic online presence for small business is likely to play an important role in the upcoming quarter.
In the last reported second quarter, Business Applications revenues were $79.6 million, increasing 12.7% sequentially and 35.1% year over year.The Zacks Consensus Estimate for the upcoming quarter is pegged at $84.0 million.
Also, Domain revenues increased 9.3% sequentially and 14.6% year over year in the second quarter. The Zacks Consensus Estimate for Domain revenues is pegged at $272.0 million.
Hosting and Presence revenues were $214.9 million in the third quarter, increasing 20.5% sequentially and 28.3% year over year.The Zacks Consensus Estimate is pegged at $224.0 million for the third quarter. The company made efforts to offeradvanced but simplified solutions in a bid to expand its small business clientele, thereby expanding its Hosting and Presence revenues.
However, the company faces significant competition in domain, hosting and presence markets from companies like Endurance, Amazon and Google, among others. Moreover the heavy debt burden, high interest payments and other controversies surrounding the company could pose challenges in the upcoming quarter.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
However, GoDaddy has a Zacks Rank #4 and an Earnings ESP of -61.54%.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
You may consider the following stocks with the right combination of elements to surpass estimates this quarter:
NVIDIA Corp. NVDA, with an Earnings ESP of +0.53% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Texas Instruments Incorporated TXN, with an Earnings ESP of +0.42% and Zacks Rank #1.
Extreme Networks, Inc., EXTR with an Earnings ESP of +9.75% and a Zacks Rank #3.
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