Shares of software company Gitlab (GTLB) fell in today’s trading as investors await its Q2 earnings results on September 3 after the market closes. Analysts are expecting earnings per share to come in at $0.10 on revenue of $177.2 million. This equates to 900% and 26.6% year-over-year increases, respectively, according to TipRanks’ data.
This is ideal because earnings per share should grow faster than revenue as this demonstrates a high degree of operating and financial leverage in the business. It’s also worth noting that Gitlab has beaten earnings estimates for 11 consecutive quarters.
And there are reasons to believe that this win streak could continue. In fact, according to TipRanks’ Bulls Say, Bears Say tool, bullish analysts point to its unique AI-powered DevSecOps platform, advanced security features, and cloud-native architecture, which should position it to capture more market share.
Nevertheless, it is important to not forget about the bearish arguments, which include a slowdown in demand from the small business segment which could act as a headwind.
Options Traders Anticipate a Large Move
Using TipRanks’ Options tool, we can see that options traders are expecting a large 15.17%, or $7.19, move from GTLB stock in either direction right after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. It’s worth noting that GTLB stock has historically seen more moves that were smaller than the current expectation than were larger.
Is GTLB Stock a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on GTLB stock based on 16 Buys, five Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 25% year-to-date drop, the average GTLB price target of $62.24 per share implies 31.31% upside potential.
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