Founded in 2014, GitLab Inc. (NASDAQ: GTLB) is an open-source coding platform that specializes in DevOps software. The software allows developers and operators to receive faster and more relevant updates. Further, it allows an organization’s development, operations, IT, security and business teams to operate on a common platform, ensuring ease and efficiency of operations.
Interestingly, the company does not have any designated office. In fact, GitLab claims to be the world’s largest all-remote company, with team members spread across 65 countries.
On October 4, 2021, GitLab announced the launch of its initial public offering (IPO). The offering comprised 8,420,000 shares of Class A common stock to be sold by GitLab Inc. and 1,980,000 shares of Class A common stock to be sold by an existing stockholder, Rients.org BV.
The company priced the total offering at $77 per share.
The stock started trading on the Nasdaq on October 14, 2021, and closed the day at a price of $103.89, up 35% from its IPO price. However, since then, it has been a downward spiral for the stock, declining 47.7%.
Presently, the company commands a market cap of $8.03 billion.
In its latest results for the first quarter, the company reported that customers with more than $5,000 and $10,000 of annual recurring revenue (ARR) increased 64% and 68% from the prior year to 5,168 and 545, respectively.
On April 19, 2022, GitLab announced that the company had become an approved vendor under the Software Licensing Program (SLP) of the State of California. The program will allow educational institutions and agencies to purchase the GitLab software licenses at an agreed-upon discount.
On December 14, 2021, the company announced the acquisition of an open-source observability distribution platform, Opstrace. With this buyout, the company aims to lower incident rates and increase developer productivity.
Financial Performance & Track Record
GitLab’s latest results for the first quarter were impressive. Revenues for the quarter came in at $87.41 million, rising 75.1% from the year-ago period. Loss per share also narrowed from the previous year’s figure of $0.195 per share to $0.18 per share.
Since its listing, the company has reported quarterly results for a total of three times. Impressively, GitLab was able to beat the Street’s loss estimates in all quarters.
Guidance & Projections
According to the IPO prospectus filed by GitLab, the total addressable market opportunity for the DevOps Platform is about $40 billion, leaving enough room for the company to grow.
Further, according to Gartner, the Global Infrastructure Software market is expected to rise from $328 billion by the end of 2021 to $458 billion by the end of 2024, denoting a CAGR of 11.8%. The company believes that it can increase its market share from $43 billion in 2021 to $55 billion by 2024.
The company predicts revenues between $93.5 million and $94.5 million for the second quarter and $398 million and $402 million for Fiscal 2023.
It expects to incur a loss of $0.24-$0.23 per share in the second quarter. Further, it anticipates a loss of $0.93-$0.89 per share for Fiscal 2023.
Performance on TipRanks
Now, let’s steal a glance at what TipRanks data is saying about the stock.
GitLab scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform the market. Shares have declined 47.7% over the past year.
Meanwhile, the company’s website traffic trend also looks solid.
According to TipRanks’ Website Traffic Tool, the GitLab website recorded a 15.31% monthly rise in global visits in May, compared to the same period last year. Further, the footfall on the company’s website has grown 24.49% year-to-date, compared to the previous year.
As can be gauged from the tool, the company’s impressive website traffic hints at the fact that its products are seeing increased traction, which bodes well for the company.
Overall, the Street has a Strong Buy consensus rating on the stock based on nine unanimous Buys. GTLB’s average price forecast of $68.9 implies upside potential of 26.7% from current levels.
GitLab remains well-positioned to take advantage of the immense growth opportunities that remain in the DevOps Platform and wider Global Infrastructure Software market. Further, the company is reporting decent numbers, with notable growth witnessed in its top line. Although persistent losses remain a headwind for the company, it seems to have the wherewithal to turn it around.
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