This Analysts Sees Potential Threat To Web.com From Godaddy's IPO

In a report published Monday, BWS Financial analyst Hamed Khorsand took a look at Godaddy Inc (NYSE: GDDY)'s IPO and the threat it poses to Web.com Group Inc (NASDAQ: WWWW).

Consequently, he issued a Hold rating and a $17 price target on the latter.

Related Link: Godaddy Is Going Public And Its Ticker Symbol Will Be GDDY

The Report

The analyst explained that Godaddy's initial public offering has provided an underlying bid in the shares of Web.com on the back of its better comps in the market and a higher valuation.

However, the risk that the company has had to deal with in having Godaddy as its largest competitor increases with the IPO. The firm even sees this threat as greater than the one posed by Google Inc (NASDAQ: GOOG) (NASDAQ: GOOGL), which recently announced it will soon start to offer domain hosting services.

"A public company is more likely to focus on growth on all metrics and not just cash flow. In the same manner that WWWW took advantage of private companies to grow its subscriber base, Godaddy could use its size to bring about changes that could encroach upon WWWW's niche," Khorsand stated.