Why is GoDaddy’s share falling despite high Q3 earnings?

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GoDaddy’s share has been falling since the 28th of October. From $84.13, it has been diving and is currently trading at $66.50. This is after the stock figures had reached a local minima on 4th November, at $65.50. So what is the reason behind the domain giant’s dip?

GoDaddy has recently released its Quarter 3 earnings. On a year to year basis, GoDaddy grew by 7.2%. In the third quarter, GoDaddy amassed a revenue of $ 1.03 billion. It also earned 63 cents per share. This exceeded the Zacks Consensus Estimate  which had predicted a figure of 58 cents per share.

So, why did the stocks of the biggest domain registrar fall? The reason behind the fall is GoDaddy’s revenue figures. Although the share price gain exceeded expectations. The reported revenue figures were far lower than what was expected. Zacks Consensus Estimate had predicted the figures at $1.04 billion. However, the actual figures didn’t match the expectations and fell short by 0.28%.

This led to a decline in interest from the investors. Stock prices are largely centered on what the company’s revenue outlook is. Although the stock’s response has a lot to do with the company’s Q3 revenues figures, Q4 predictions hasn’t been a swift breeze either.

The company has already predicted revenue figures ranging from $1.03 billion to $1.05 billion. This means that we can expect a flat line, when growth from Q3 to Q4 is concerned. This severely hit the company’s stock and the perception around it.

The foreign currency exchange issue also hasn’t been a help for the domain industry leader either. On a constant-currency basis revenues in this quarter clocked an 8.8% increase. However, actual growth only gathered a 7.2% rise. In the past 4 quarters, GoDaddy has missed the Zacks Consensus Estimate in 2 quarters.

However, on a positive note the estimates for Q4 has been slightly higher than GoDaddy’s own expectations, at $1.06 billion. Zacks also gave the company a Zacks Rank of 3, which means the stocks of the company should be held.

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