Deutsche Bank Reiterates Buy On GoDaddy Into Q4 Earnings

Deutsche Bank issued an update on Godaddy Inc GDDY ahead of the company's earnings report after Thursday's market close. Analysts reiterated their Buy rating and $34 price target.

Deepak Mathivanan and Ross Sandler wrote, "GDDY is the best-positioned company in the website presence sector given its dominant competitive position and still has plenty of opportunity to upsell incremental higher ARPU products to its 14m customer base."

Deutsche Bank gave two key reasons why they believe Godaddy will show strength in 2016.

1. Revenue growth

Analysts at Deutsche Bank expect FY16 revenue growth of 14 percent year-over-year, which is driven by 8 percent growth in total customers and 5 percent growth in ARPU. Deutsche Bank believes that Godaddy can continue to expand its revenue base, particularly with its business applications offered to domain customers.

2. Profitability

Deutsche Bank noted that Godaddy may be able to drive margin expansion by aligning its product mix toward a higher margin web presence and business applications. Furthermore, the company has the potential to manage advertising spending in a way that maximizes exposure while improving profitability.

Shares of Godaddy recently traded at $29.10, up 7.42 percent.