Is GoDaddy a Value Stock?

Almost every business owner with a website has heard of GoDaddy (NYSE: GDDY). It's the world's largest website registrar and generates annual recurring revenue from numerous businesses that keep their domain names. Companies only stop paying this expense when they're out of business, which makes GoDaddy's revenue predictable.

However, there is meaningful growth hidden behind the overall results, and a 35% year-to-date dip has turned the company into an underrated value stock.

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GoDaddy doesn't just make money with domains

Domain registration is still a large part of GoDaddy's business. It brought in $768.7 million in the first quarter of 2026, making up 60.7% of total revenue. It was up by only 2.8% year over year, which partially explains why the stock trades at an 8.5 forward P/E ratio.

However, there is a true growth engine hidden beneath the domains. GoDaddy has a segment called applications and commerce that makes up the remaining 39.3% of revenue. Some people use GoDaddy to create websites, store data, promote e-commerce product listings seamlessly, and design branding assets.

This part of the business grew by 11.6% year over year in Q1. It will gradually make up a higher percentage of total revenue, and it gives people who buy a GoDaddy domain more reasons to stick with the GoDaddy ecosystem.

GoDaddy is using AI to enhance its offerings

The "applications and commerce" segment is already delivering respectable growth, but GoDaddy's AI investments can accelerate future gains for that part of the business. The company recently released the Airo AI Builder, which lets business owners design websites, e-commerce stores, and apps using AI prompts.

This tool saves business owners a lot of time, and it's already translating into revenue growth. GoDaddy told investors in its Q1 press release that the Airo AI Builder had "strong early adoption" and achieved a multimillion-dollar annualized bookings run rate within weeks of its beta launch.

GoDaddy's total revenue was $1.3 billion in Q1, which was a 6% year-over-year increase. This figure indicates that the Airo AI Builder still makes up a very small slice of total revenue. However, if momentum continues to build, it can start to influence overall sales.

The success also suggests that GoDaddy will continue to introduce new AI-enabled products and services. That can open up more revenue streams and ensure that the "applications and commerce" segment continues to exhibit double-digit year-over-year growth rates.

If the hottest part of the business continues to remain hot, the 8.5 forward P/E ratio looks like an absolute bargain. While some tech stocks continue to soar, leaving them vulnerable in the event of rising interest rates or broader corrections, GoDaddy offers steady growth and a greater margin of safety than most picks.

Marc Guberti has no position in any of the stocks mentioned. The Motley Fool recommends GoDaddy. The Motley Fool has a disclosure policy.