Located in San Francisco, Gitlab Inc. (GTLB) is a software development company offering the DevOps platform - an enterprise software application that allows for faster cycle time, leading to improved visibility and control over the different stages of the DevOps lifecycle. GitLab’s centralized platform allows users across various teams to work in a collaborative and efficient manner. Founded in 2011, Gitlab operates in the U.S., the Asia Pacific, and Europe. 

Gitlab’s stock has been a laggard so far in 2024, down 15% on a YTD basis. However, the shares have notched a standout gain of 63.3% over the past 52 weeks.

Gitlab Beats on Q4 Earnings, But…

Gitlab posted its Q4 and full-year results at the beginning of March. Revenue for the quarter came in at $163.8 million, up 33% YoY, and beating estimates of $158.2 million. The company swung to a profit of $0.15 per share from a year-ago loss of $0.03 per share, sailing past estimates of $0.08 per share. 

Spending from existing customers rose 30% while its remaining performance obligations increased 55% to $674 million, showcasing its solid contract work channels. Revenue for the full year arrived at $579.9 million, while the GAAP operating margin was 32%, based on a GAAP loss of $2.75 per share, compared to $1.16 per share in the previous year. 

GTLB slid after the earnings release, as investors were disappointed with its guidance. Management expects full-year revenue to grow around 26% to $725 million to $731 million, short of Wall Street’s estimated $731.7 million. Likewise, earnings for the year were expected to reach $0.35, compared to Gitlab's guidance for adjusted earnings $0.19 to $0.23 per share. 

GTLB Stock Wins Over Analysts

Analysts seem unbothered by the light guidance, and have grown increasingly bullish on Gitlab, with a consensus “Strong Buy” rating - up from “Moderate Buy” two months ago, as the stock has recently scored top ratings from analysts at Wells Fargo, KeyBank, William Blair, Piper Sandler, and more. 

Out of the 23 analysts currently tracking the stock, 17 have a “Strong Buy” recommendation on GTLB, 2 have a “Moderate Buy” rating, and the remaining 4 analysts have a “Hold” rating. 

Last week, Raymond James upgraded GitLab to Outperform, with a price target of $70. "GitLab's FY25 revenue can ultimately exceed $750M," said analysts led by Adam Tindle in a note. "Based on our analysis, we believe GitLab's growth rate should approach or exceed 30% year over year as FY25 progresses."

The mean price target for GTLB is now $71.14, implying expected upside of nearly 33% from Wednesday's close.