Web Presence Sector Players GoDaddy, Wix, And Squarespace Get Bullish Rating From This Analyst - Here's Why

Seaport analyst Aaron Kessler initiated coverage of ten companies within the Internet Sector. 

For SMB Services/Web Presence, Kessler had a Buy rating on GoDaddy Inc GDDY with a price target of $85, a Buy rating on Wix.Com Ltd WIX with a price target of $103, and a Buy rating on Squarespace, Inc SQSP with a price target of $35.

For GoDaddy, Kessler expects continued momentum in Applications & Commerce driven by Create & Grow and Payments. The analyst expects softer near-term growth for Core Platform (domains, aftermarket), though comps ease in the second half of 2024. The analyst expects solid margin expansion despite more muted near-term growth. 

Kessler projects Q3 revenue and EPS of $1.07 billion, in line with the consensus and $0.73 vs. consensus $0.71.

For Wix, Kessler expects continued Creative Subscriptions strength driven by Partners' revenues (36% Y/Y in 2Q) and higher pricing. The analyst also flagged the company as demonstrating substantial marketing leverage and says FCF margin expansion is underappreciated (targeting 25% FCF margins in 2025). 

Kessler projects Q3 revenue and EPS loss of $389.8 million vs. consensus $389.7 million and $(0.19) vs. consensus $0.67.

For Squarespace, Kessler expects continued Presence momentum from new customers and pricing power. The analyst also highlighted solid top-line growth and increased marketing leverage, driving substantial margin expansion in 2023.

Kessler projects Q3 revenue and EPS of $250.9 million vs. consensus $252.01 million and $0.11 vs. consensus $0.13.

Price Action: GDDY shares traded higher by 1.66% at $74.90 on the last check Tuesday.