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GoDaddy (GDDY) Invests $15M for Gilbert Office Expansion

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GoDaddy Inc. (GDDY - Free Report) is expanding its Gilbert Office by 15,000 square feet and with a $15 million investment.

The company has signed a new 10-year lease agreement for the resulting 180,000-square foot facility. Renovations will start this fall are likely to be completed by early 2020.

We observe that GoDaddy shares have rallied 25.8% year to date, outperforming the 20.2% rally of the industry it belongs to.

Flexible Workplace in Focus

We believe that the new move is part of GoDaddy’s bid to develop a highly flexible workplace, capable of adapting to changing business needs on the one hand and serving local communities (through job creation and retention) on the other.

The company intends to strike a balance between fun and flexibility through infrastructure and architecture in its offices. GoDaddy’s workplaces feature indoor slides, yoga rooms and peddle-kart race tracks to professionally operated food services. The renovation is expected to include this unique practice.

GoDaddy Inc. Revenue (TTM)

Gilbert’s Economy Likely to Get a Boost

According to a report from Applied Economics, a consulting firm, continuation and expansion of operations on GoDaddy’s part could generate an economic impact of $1.53 billion for Gilbert in the 10 years to come. The report also stated that continued operations will support approximately 1,788 jobs and create $80.5 million in annual personal income in Gilbert.

Wrapping Up

Expansion efforts in a particular region reflect that a company sees long-term potential, especially in terms of human resource that eventually drive the next phase of revenue growth.

It appears that this is exactly what’s GoDaddy’s management is thinking. According to GoDaddy’s vice president of global real estate, Calvin Crowder, “We’ve found a wealth of talented, customer-focused employees here and it’s worthwhile to invest in them and upgrade the facility.”

Zacks Rank and Stocks to Consider

GoDaddy has a Zacks Rank #3 (Hold). Better-ranked stocks in the broader technology sector include Applied Materials (AMAT - Free Report) , Activision Blizzard (ATVI - Free Report) and Applied Optoelectronics (AAOI - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Applied Materials, Activision and Applied Optoelectronics is currently projected to be 17.1%, 13.6% and 17.5%, respectively.

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