GoDaddy Inc. (GDDY - Free Report) is set to report fourth-quarter 2017 results on Feb 22.
Last quarter, the company delivered in-line results, with an average four-quarter positive surprise of 120.8%.
The company's shares have gained only 52% in the past 12 months, outperforming the industry’s growth of 60.7%.
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 fourth quarter, driven by increasing investments in products, technology platform and strong customer growth. Also, the company is expanding internationally by investing in technology, marketing programs and customer service 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 third quarter, Business Applications revenues were $84.8 million, increasing 6.5% sequentially and 38.1% year over year. The Zacks Consensus Estimate for the quarter under review is pegged at $89.0 million.
Also, Domain revenues increased 3.1% sequentially and 14.8% year over year in the third quarter. The Zacks Consensus Estimate for Domain revenues is pegged at $278.0 million.
Hosting and Presence revenues were $225.9 million in the third quarter, increasing 5.1% sequentially and 29.8% from the prior-year quarter. The Zacks Consensus Estimate is pegged at $227.0 million for the fourth quarter. The company made efforts to offer advanced but simplified solutions in a bid to expand its small business clientele, thereby expanding its Hosting and Presence revenues.
However, the company faces 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 quarter to be reported.
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 #3 and an Earnings ESP of -22.77%.
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:
Applied Materials, Inc. (AMAT - Free Report) , with an Earnings ESP of +2.06% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Newfield Exploration Company (NFX - Free Report) , with an Earnings ESP of +1.64% and a Zacks Rank #3.
Advanced Micro Devices, Inc. (AMD - Free Report) , with an Earnings ESP of +8.72% and a Zacks Rank #3.
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