Yesterday, GitLab (NASDAQ:GTLB) killed it with an outstanding earnings report and some excellent guidance to go with it. Now, the streak is carrying on for a second straight day as the full implications of the earnings report and guidance sink in. The result: a double-digit gain that held on through Tuesday’s trading day as GitLab closed up 31.27%.
While GitLab did post a loss in earnings, coming in at -$0.06 per share, that was better than the analyst consensus of -$0.14 per share. Revenue, meanwhile, was up massively, hitting $126.88 million and surpassing not only analyst expectations but also the previous year’s revenue figures by 45.2%. That by itself would have been excellent news, but it got better; GitLab’s growth was organic, and improvements to both margin and overall efficiency cut costs and made an already good quarter look even better.
Then Gitlab followed up its win by announcing its new plans for generative AI tools. Expected to cost just $9 per user per month, the new artificial intelligence add-on tool will offer a string of new functions for users, including suggestions to use while writing code. The new AI tool, dubbed “ModelOps,” will be added to the “DevSecOps” tool. Bank of America analyst Koji Ikeda noted that the tool “…has the potential to be a healthy growth driver in FY25.”
Analysts, meanwhile, are mostly in favor of GitLab stock by a factor of three to one. With 12 Buy ratings against four Holds, it’s no surprise GitLab stock is considered a Strong Buy by analyst consensus. However, with an average price target of $44.64 per share, it also offers investors 3.88% downside risk.
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