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Why GoDaddy Stock Gained 22% in April

What happened

GoDaddy (NYSE: GDDY) shares outperformed a strong market last month, gaining 22% compared to the 13% increase of the S&P 500, according to data provided by S&P Global Market Intelligence.

The website hosting giant has since added to those gains and is now firmly back in positive territory for 2020.

Image source: Getty Images.

So what

GoDaddy benefited from the reduction in pessimism that followed aggressive moves by the Federal Reserve in April aimed at cushioning the economy from a looming financial crisis. But investors also gained confidence that the tech company might report solid first-quarter operating trends. Its last earnings report, in February, showed accelerating sales gains that trounced Wall Street's estimates.

Now what

On Wednesday, GoDaddy reported first-quarter numbers that largely confirmed those optimistic readings, with revenue increasing by 11.5% and operating cash flow jumping 18% to $233 million. The COVID-19 pandemic is having a mixed impact on its business, and is putting pressure on hosting demand.

Yet executives are still predicting growth for the fiscal second quarter as companies' digital presences continue to grow in importance. "The durability of our business model and strength of our balance sheet position us well in times of uncertainty," CFO Ray Winborne told investors.

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Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool recommends GoDaddy. The Motley Fool has a disclosure policy.


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