From Nasdaq: 2024-11-21 11:30:00

GitLab (GTLB) shares have outperformed the Computer & Technology sector and Internet Software industry, with a 13.3% jump in a month. Strong fiscal 2025 revenue growth expectations and an expanding clientele are key factors driving this performance. Revenue and earnings estimates for fiscal 2025 and third-quarter fiscal 2025 show promising growth rates.
GTLB’s FY25 revenue estimate is $743.41 million, indicating a 28.19% increase year-over-year. Earnings estimate is 46 cents per share. The consensus marks for fiscal third quarter revenues and earnings are also positive, showing growth rates of 25.39% and 16 cents per share, respectively. GTLB has consistently beaten earnings estimates in the past.
GitLab’s strong portfolio leveraging AI technology has resulted in notable client expansion and increased revenues. The company’s AI offerings like GitLab Duo and GitLab Duo Pro are gaining traction with customers like Barclays, F5, KeyBank, Lockheed Martin, and others. GitLab Dedicated is attracting enterprises with complex security needs.
Despite GitLab’s strong growth prospects and expanding partner base, the stock is currently overvalued with a forward P/S ratio of 11.23X compared to the industry’s 2.94X. While the company’s portfolio and partnerships are impressive, a cautious spending environment and stretched valuation are potential challenges.
Investors considering GTLB should note the company’s growth potential but be wary of the current overvaluation. GitLab’s Zacks Rank #3 (Hold) suggests waiting for a more favorable entry point. While the company’s portfolio and partnerships are strong, macroeconomic conditions and valuation concerns are factors to consider when evaluating the stock.



Read more at Nasdaq: GitLab Rises 13% in a Month: Buy, Sell or Hold the GTLB Stock?