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GoDaddy earnings quality score

How much of the reported profit is backed by cash, and how many markers of managed earnings the filings show

Score80 / 100 · grade A · rank 60 of 1027

GoDaddy (GDDY) scores 80 of 100 for earnings quality, grade A: rank 60 of 1027 companies and 11 of 203 in technology. It loses the most points on discretionary accruals of -4.2% of assets (modified Jones), larger than most, accruals of -8.9% of assets, lower than 80% of companies (profit backed by cash), Montier C-score 1 of 5 checks failed. It earns full or near-full marks for Dechow F-score 0.69 (normal), profit about as variable as cash flow (smoothness 1.88).

What earned and lost points

ComponentWhat the filings showPointsOf
Accrualsaccruals of -8.9% of assets, lower than 80% of companies (profit backed by cash)2127
Dechow F-scoreDechow F-score 0.69 (normal)2020
Montier C-scoreMontier C-score 1 of 5 checks failed1620
Discretionary accrualsdiscretionary accruals of -4.2% of assets (modified Jones), larger than most513
Non-GAAP gapadjusted earnings 6% below GAAP1013
Earnings smoothnessprofit about as variable as cash flow (smoothness 1.88)77
GDDY: share of the available points, by componentGDDY: share of the available points, by componentAccruals80%Discretionary accruals39%Dechow F-score100%Montier C-score80%Non-GAAP gap79%Earnings smoothness100%

How the score is built

Eight published measures, each scored against the whole universe or on its own scale and weighted: accruals 20, discretionary accruals 10, Beneish M 15, Dechow F 15, Montier C 15, Piotroski F 10, the non-GAAP gap 10, smoothness 5. A measure that cannot be computed (Beneish for a bank, say) drops out and the rest is rescaled, so every company is scored on what applies to it.

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Computed from the companies’ own XBRL filings (latest fiscal year) by published formulas; a statistical screen, not an audit or an accusation. A low score means the reported profit shows more of the markers of managed or low-quality earnings than its peers. Not investment advice.