Shares of GitLab (NASDAQ:GTLB) gained in trading after a report that the company was exploring a sale following interest from potential acquirers. According to an exclusive report by Reuters, GitLab is working with investment bankers on a sale process and has attracted interest from peers such as cloud monitoring companies like Datadog (NASDAQ:DDOG).
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More About GitLab
GitLab is backed by Google (NASDAQ:GOOGL), which holds a 22.2% voting stake in the company. The company currently has a market cap of around $8 billion, and its platform allows different teams, such as development, operations, and security, to design and manage software using a single tool. This setup improves teamwork and streamlines software operations.
The company delivered solid Q1 results with earnings per share of $0.03, beating analysts’ consensus estimate of -$0.04 per share. Sales increased by 33.3% year-over-year, with revenue hitting $169.19 million.
Tech Sector M&A Surges
There is an increase in M&A activity in the tech sector as advances in AI and cloud computing are driving companies to expand their offerings. There have been reports that Google could be in discussions to acquire cybersecurity startup Wiz for around $23 billion.
Is GTLB a Good Stock to Buy?
Analysts remain bullish about GTLB stock, with a Strong Buy consensus rating based on 15 Buys and five Holds. Year-to-date, GTLB has declined by more than 10%, and the average GTLB price target of $65.06 implies an upside potential of 18.2% from current levels.
