GoDaddy (GDDY) Following Its New Credit Line Is The Upside Story Still Intact
What the new credit facility means for GoDaddy’s balance sheet
GoDaddy (GDDY) recently amended its long running credit agreement, adding a new US$1.2b revolving credit facility that replaces the prior US$1.0b line and extends access to liquidity out to 2031.
The facility carries margin ranges that depend on the company’s first lien net leverage ratio and keeps the same leverage covenant, which requires a ratio of no more than 5.75:1.00 once at least 40% of total commitments are drawn.
For you as an investor, this update is mainly about financial flexibility. A larger, longer dated revolver can support working capital, potential acquisitions or buybacks if the board chooses, without forcing GoDaddy to rely only on term debt or equity issuance.
It also introduces a springing maturity feature, which brings the revolver’s effective maturity forward if sizeable debt of more than US$500m approaches maturity. That link between the facility and other borrowings is worth keeping in mind when you look at GoDaddy’s overall funding profile.
See our latest analysis for GoDaddy.
Recent trading in GoDaddy reflects a mixed picture, with the share price down 5.56% over the last day but up 8.87% over 90 days. Over a 1 year period the total shareholder return is down 34.98%, while the 3 year total shareholder return is up 35.68%. This suggests that shorter term momentum has cooled after a stronger multi year run and that the new credit facility and earlier domain promotion issues are now being weighed together by the market.
If you want to see what else is moving in related areas, this is a good moment to look at companies benefiting from similar digital demand patterns using the 55 AI infrastructure stocks
The recent swing in GoDaddy’s share price sits between two explanations. Either investors are rethinking the quality of the underlying business after the domain promotion issues, or sentiment is simply resetting after a strong multi year run.
Most Popular Narrative: 15.2% Undervalued
On the most followed view, GoDaddy’s fair value of $111.93 sits above the last close at $94.91. This puts fresh focus on what is driving that gap.
Large-scale adoption of subscription-based SaaS and bundling initiatives, enabled by accelerated AI-driven product development, is shifting revenue mix toward recurring and higher-margin streams. This is improving revenue predictability and EBITDA margin expansion (targeting 33% by 2026).
Want to see why this narrative still points to upside even after recent volatility? It leans on steady revenue compounding, rising margins and a future earnings multiple that undercuts many US IT peers. The full story sets out how those moving parts line up against today’s $94.91 share price.
Result: Fair Value of $111.93 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, GoDaddy’s story could change quickly if AI products like Airo fail to gain traction or if class action investigations begin to weigh on investor confidence.
Find out about the key risks to this GoDaddy narrative.
Next Steps
With GoDaddy caught between concerns and optimism, it makes sense to move quickly and review the underlying data yourself. A clear next step is to weigh up the trade off using the 4 key rewards and 2 important warning signs.
Looking for more investment ideas beyond GoDaddy?
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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.
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