GoDaddy Inc.'s (NYSE:GDDY) price-to-earnings (or "P/E") ratio of 32.8x might make it look like a strong sell right now compared to the market in the United States, where around half of the companies have P/E ratios below 13x and even P/E's below 7x are quite common. However, the P/E might be quite high for a reason and it requires further investigation to determine if it's justified.
Recent times have been advantageous for GoDaddy as its earnings have been rising faster than most other companies. The P/E is probably high because investors think this strong earnings performance will continue. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
See our latest analysis for GoDaddy
NYSE:GDDY Price Based on Past Earnings September 29th 2022 Keen to find out how analysts think GoDaddy's future stacks up against the industry? In that case, our
free report is a great place to start.
Does Growth Match The High P/E?
In order to justify its P/E ratio, GoDaddy would need to produce outstanding growth well in excess of the market.
Taking a look back first, we see that the company grew earnings per share by an impressive 82% last year. The strong recent performance means it was also able to grow EPS by 564% in total over the last three years. Therefore, it's fair to say the earnings growth recently has been superb for the company.
Looking ahead now, EPS is anticipated to climb by 33% each year during the coming three years according to the eleven analysts following the company. With the market only predicted to deliver 9.6% each year, the company is positioned for a stronger earnings result.
With this information, we can see why GoDaddy is trading at such a high P/E compared to the market. It seems most investors are expecting this strong future growth and are willing to pay more for the stock.
The Bottom Line On GoDaddy's P/E
Typically, we'd caution against reading too much into price-to-earnings ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.
We've established that GoDaddy maintains its high P/E on the strength of its forecast growth being higher than the wider market, as expected. At this stage investors feel the potential for a deterioration in earnings isn't great enough to justify a lower P/E ratio. Unless these conditions change, they will continue to provide strong support to the share price.
There are also other vital risk factors to consider and we've discovered 3 warning signs for GoDaddy (1 is a bit unpleasant!) that you should be aware of before investing here.
If P/E ratios interest you, you may wish to see this free collection of other companies that have grown earnings strongly and trade on P/E's below 20x.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Godaddy(Tmall Inc.)(纽约证券交易所股票代码:GDDY)32.8倍的市盈率可能会让它看起来像是一个强劲的卖盘,而在美国,大约一半的公司的市盈率低于13倍,甚至低于7倍的市盈率也很常见。然而,市盈率可能相当高是有原因的,需要进一步调查才能确定它是否合理。
最近的时期对Godaddy很有利,因为它的盈利增长速度快于大多数其他公司。市盈率之所以高,可能是因为投资者认为这种强劲的盈利表现将持续下去。你真的希望如此,否则你会无缘无故地付出相当大的代价。
查看我们对Godaddy的最新分析
纽约证券交易所:基于过去收益的GDDY价格2022年9月29日渴望了解分析师如何看待Godaddy的未来与行业?那样的话,我们的
免费报告是一个很好的起点。
增长是否与高市盈率相匹配?
为了证明其市盈率是合理的,新浪Godaddy需要实现远远超出市场的出色增长。
首先回顾一下,我们看到该公司去年每股收益增长了82%,令人印象深刻。最近的强劲表现意味着它还能够在过去三年中实现每股收益总计564%的增长。因此,公平地说,最近的收益增长对公司来说是一流的。
根据跟踪该公司的11位分析师的说法,展望未来三年,每股收益预计将以每年33%的速度攀升。由于市场预计每年只有9.6%的增长,该公司将迎来更强劲的收益结果。
有了这些信息,我们就可以理解为什么Godaddy的市盈率比市场高出这么多。似乎大多数投资者都在期待这种强劲的未来增长,并愿意为该股支付更高的价格。
Godaddy市盈率的底线
通常,在做出投资决策时,我们会告诫不要过度解读市盈率,尽管它可以充分揭示其他市场参与者对该公司的看法。
我们已经确定,Godaddy之所以保持高市盈率,是因为其预期增长高于更广泛的市场。在这个阶段,投资者认为盈利恶化的可能性还不够大,不足以证明较低的市盈率是合理的。除非这些条件改变,否则将继续为股价提供强有力的支撑。
还有其他重要的风险因素需要考虑,我们发现Godaddy的3个警示标志(1有点令人不快!)在这里投资之前你应该意识到这一点。
如果你对市盈率感兴趣,你可能想看看这个免费其他盈利增长强劲、市盈率低于20倍的公司。
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本文由Simply Wall St.撰写,具有概括性。我们仅使用不偏不倚的方法提供基于历史数据和分析师预测的评论,我们的文章并不打算作为财务建议。它不构成买卖任何股票的建议,也没有考虑你的目标或你的财务状况。我们的目标是为您带来由基本面数据驱动的长期重点分析。请注意,我们的分析可能不会将最新的对价格敏感的公司公告或定性材料考虑在内。Simply Wall St.对上述任何一只股票都没有持仓。