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.)(紐約證券交易所股票代碼:GDDY)32.8倍的市盈率可能會讓它看起來像是一個強勁的賣盤,而在美國,大約一半的公司的市盈率低於13倍,甚至低於7倍的市盈率也很常見。然而,市盈率可能相當高是有原因的,需要進一步調查才能確定它是否合理。
最近的時期對Godaddy很有利,因為它的盈利增長速度快於大多數其他公司。市盈率之所以高,可能是因為投資者認為這種強勁的盈利表現將持續下去。你真的希望如此,否則你會無緣無故地付出相當大的代價。
查看我們對Godaddy的最新分析
紐約證券交易所:基於過去收益的GDDY價格2022年9月29日渴望瞭解分析師如何看待Godaddy的未來與行業?那樣的話,我們的
免費報告是一個很好的起點。
增長是否與高市盈率相匹配?
為了證明其市盈率是合理的,新浪Godaddy需要實現遠遠超出市場的出色增長。
首先回顧一下,我們看到該公司去年每股收益增長了82%,令人印象深刻。最近的強勁表現意味着它還能夠在過去三年中實現每股收益總計564%的增長。因此,公平地説,最近的收益增長對公司來説是一流的。
根據跟蹤該公司的11位分析師的説法,展望未來三年,每股收益預計將以每年33%的速度攀升。由於市場預計每年只有9.6%的增長,該公司將迎來更強勁的收益結果。
有了這些信息,我們就可以理解為什麼Godaddy的市盈率比市場高出這麼多。似乎大多數投資者都在期待這種強勁的未來增長,並願意為該股支付更高的價格。
Godaddy市盈率的底線
通常,在做出投資決策時,我們會告誡不要過度解讀市盈率,儘管它可以充分揭示其他市場參與者對該公司的看法。
我們已經確定,Godaddy之所以保持高市盈率,是因為其預期增長高於更廣泛的市場。在這個階段,投資者認為盈利惡化的可能性還不夠大,不足以證明較低的市盈率是合理的。除非這些條件改變,否則將繼續為股價提供強有力的支撐。
還有其他重要的風險因素需要考慮,我們發現Godaddy的3個警示標誌(1有點令人不快!)在這裏投資之前你應該意識到這一點。
如果你對市盈率感興趣,你可能想看看這個免費其他盈利增長強勁、市盈率低於20倍的公司。
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本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。