Gitlab (GTLB) AI Stock Analysis

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Gitlab

(NASDAQ:GTLB)

60Neutral

GitLab shows strong revenue growth and strategic expansions, particularly in AI, which are positives for long-term growth. However, current financial metrics, including negative profitability and weak technical indicators, present challenges that could impact near-term performance.

Positive Factors

Product Adoption

GitLab's Duo AI products focus on increasing developer productivity and are becoming a strong growth driver.

Revenue Growth

GitLab is expected to drive revenue growth above its infrastructure software peer average.

User Growth

GTLB now has more than 50 million registered users, an increase from more than 40 million in the previous quarter.

Negative Factors

Cost Increase

The increase in cost of revenue in FY25 was primarily due to a significant rise in third-party hosting costs for SaaS and cloud usage.

Price Target Adjustment

The price target was modestly lowered to $72 from $80.

Stock Price Decline

With GTLB shares down approximately 25% from a previous high, the current risk/reward is considered attractive.

Gitlab (GTLB) vs. S&P 500 (SPY)

Market Cap

$7.05B

Dividend YieldN/A

Average Volume (3M)3.14M

Price to Earnings (P/E)―

Beta (1Y)1.40

Revenue Growth30.93%

EPS Growth99.45%

CountryUS

Employees2,375

SectorTechnology

Sector Strength51

IndustrySoftware - Application

Share Statistics

EPS (TTM)-0.03

Shares Outstanding144,600,000

10 Day Avg. Volume3,449,175

30 Day Avg. Volume3,138,130

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)11.62

Price to Cash Flow (P/CF)-11.70

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$78.19

Price Target Upside86.52% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering22

Gitlab Business Overview & Revenue Model

Company DescriptionGitLab Inc., through its subsidiaries, develops software for the software development lifecycle in the United States, Europe, and the Asia Pacific. The company offers GitLab, a DevOps platform, which is a single application that leads to faster cycle time and allows visibility throughout and control over various stages of the DevOps lifecycle. It helps organizations to plan, build, secure, and deploy software to drive business outcomes. The company also provides related training and professional services. The company was formerly known as GitLab B.V. and changed its name to GitLab Inc. in July 2015. The company was founded in 2011 and is headquartered in San Francisco, California.

How the Company Makes MoneyGitLab makes money primarily through a subscription-based revenue model. The company offers its platform in different tiers, including free, premium, and ultimate versions, each providing varying levels of features and support. Organizations can choose the plan that best suits their needs, with higher-tier plans offering advanced features and premium support. Additionally, GitLab generates revenue from its professional services, which include training, consulting, and implementation support for companies adopting their platform. Key partnerships with cloud providers and integration with popular development tools further enhance GitLab's value proposition, contributing to customer acquisition and retention.

Gitlab Financial Statement Overview

Summary

Gitlab's financial performance shows strong revenue growth and gross margins, indicating effective cost management. However, the company faces challenges with negative cash flows and net income, which impact overall profitability.

Income Statement

Positive

Gitlab's revenue has shown consistent growth over the years, with a TTM revenue of $759 million, up from $579 million in the previous year. The gross profit margin remains strong at 88.8% for TTM, indicating efficient cost management. However, the company continues to post negative EBIT and net income margins, reflecting ongoing challenges in achieving profitability despite the revenue growth.

Balance Sheet

Positive

The balance sheet reflects a solid equity position with stockholders' equity at $780 million and no total debt, minimizing financial risk. The equity ratio is strong at 55.7%, which indicates a healthy balance of equity to total assets. However, the company has struggled with negative net income, impacting return on equity.

Cash Flow

Neutral

Gitlab's cash flow from operations turned negative in the TTM period at -$63.97 million, a decline from positive cash flow in the previous year. Free cash flow also decreased to -$67.74 million. The company needs to improve its cash generation capabilities to support growth and operational needs.

Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Breakdown
Income Statement		Total Revenue
759.25M	579.91M	424.34M	252.65M	152.18M
	Gross Profit
674.11M	520.20M	372.66M	222.67M	133.71M
	EBIT
-142.72M	-187.44M	-211.41M	-128.96M	-213.88M
	EBITDA
-131.73M	-180.91M	-205.82M	-127.75M	-213.66M
	Net Income Common Stockholders
-5.23M	-424.17M	-180.70M	-157.56M	-192.19M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
992.38M	1.04B	936.65M	934.70M	282.85M
	Total Assets
1.40B	1.32B	1.17B	1.09B	362.57M
	Total Debt
392.00K	410.00K	1.13M	0.00	0.00
	Net Debt
-227.26M	-287.59M	-294.27M	-884.67M	-282.85M
	Total Liabilities
577.96M	699.93M	344.48M	292.17M	593.79M
	Stockholders Equity
775.91M	571.17M	771.02M	774.87M	-231.22M
Cash Flow		Free Cash Flow
-67.74M	33.44M	-83.48M	-53.35M	-74.51M
	Operating Cash Flow
-63.97M	35.04M	-77.41M	-49.81M	-73.58M
	Investing Cash Flow
-30.49M	-86.24M	-605.69M	-53.90M	-842.00K
	Financing Cash Flow
32.62M	45.23M	97.48M	701.18M	12.95M

Gitlab Technical Analysis

Technical Analysis Sentiment

Negative

Last Price41.92

Price Trends

50DMA

57.21

Negative

100DMA

59.75

Negative

200DMA

55.70

Negative

Market Momentum

MACD

-3.40

Positive

RSI

34.40

Neutral

STOCH

23.60

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GTLB, the sentiment is Negative. The current price of 41.92 is below the 20-day moving average (MA) of 47.59, below the 50-day MA of 57.21, and below the 200-day MA of 55.70, indicating a bearish trend. The MACD of -3.40 indicates Positive momentum. The RSI at 34.40 is Neutral, neither overbought nor oversold. The STOCH value of 23.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GTLB.

Gitlab Risk Analysis

Gitlab disclosed 63 risk factors in its most recent earnings report. Gitlab reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Gitlab Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SRAD	84 Outperform	$6.60B	180.70	3.92%	―	26.10%	0.16%
FRSH	63 Neutral	$3.78B	―	-8.63%	―	20.79%	32.50%
FROG	61 Neutral	$3.48B	―	-9.53%	―	22.47%	-5.48%
GTLB	60 Neutral	$7.05B	―	-0.20%	―	30.93%	99.45%
ASAN	58 Neutral	$3.62B	―	-92.26%	―	10.94%	4.54%
Sector *	57 Neutral	$19.95B	9.66	-12.05%	2.76%	5.40%	-24.89%
ALIT	52 Neutral	$2.69B	―	-3.15%	1.61%	-31.61%	51.16%

* Technology Sector Average

Performance Comparison

GTLB

Gitlab

41.92

-11.91

-22.13%

FROG

JFrog

31.01

-6.44

-17.20%

ASAN

Asana

15.55

1.69

12.19%

ALIT

Alight

4.96

-4.05

-44.95%

SRAD

Sportradar Group AG

22.57

12.39

121.71%

FRSH

Freshworks

12.53

-4.57

-26.73%

Gitlab Earnings Call Summary

Earnings Call Date: Mar 3, 2025 | % Change Since: -25.48% | Next Earnings Date: Jun 9, 2025

Earnings Call Sentiment Positive

The earnings call reflects a strong performance with significant revenue growth and margin improvements. Notable achievements include strong customer wins and expansions, particularly in AI and GitLab Dedicated. However, challenges remain in the China joint venture and the uncertain macroeconomic environment.

Highlights

Strong Year-over-Year Revenue Growth

Fourth quarter revenue increased by 29% year over year to $211 million, exceeding expectations. Fiscal year revenue grew 31% to $759.2 million.

Record Non-GAAP Operating Margin

Non-GAAP operating margin reached a record 18% in Q4, which is an increase of 960 basis points year over year.

Significant Customer Wins and Expansions

Secured notable deals with Anthropic, AWS Professional Services, and Delta Airlines, among others. Ultimate has reached 50% of total ARR.

GitLab Duo and AI Strategy

Continued traction with GitLab Duo, particularly Duo Enterprise, with key wins including Barclays and Capgemini. Customers are actively evaluating AI tools.

Growth in GitLab Dedicated

GitLab Dedicated grew approximately 90% year over year in Q4, with notable adoption by large enterprise customers like Delta Airlines and NatWest.

Lowlights

China Joint Venture Challenges

Non-GAAP expenses related to Jihu were $3.2 million in Q4, with ongoing challenges in deconsolidating this joint venture.

Macroeconomic Uncertainty

Guidance assumes the macroeconomic environment remains consistent, indicating potential risks in the external economic landscape.

Company Guidance

During the GitLab Q4 FY2025 earnings call, guidance was provided for Q1 and FY2026, with expectations of revenue between $212 million and $213 million for Q1, marking a 25% to 26% increase year-over-year. For FY2026, total revenue is projected to be between $936 million and $942 million, reflecting a growth rate of approximately 24% year-over-year. The company anticipates a non-GAAP operating income ranging from $21 million to $22 million for Q1, and between $109 million and $114 million for the full fiscal year. Additionally, a non-GAAP net income per share is expected to be between $0.14 and $0.15 for Q1, and $0.68 to $0.72 for FY2026, assuming 172 million and 173 million weighted average diluted shares outstanding, respectively. The guidance considers the completion of the annual stand-alone selling price analysis, with no material impact on revenue allocation, and assumes the macroeconomic environment remains consistent.

Gitlab Corporate Events

Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures

GitLab Reports Strong Q4 2025 Financial Results

Positive

Mar 3, 2025

On March 3, 2025, GitLab Inc. reported strong financial results for the fourth quarter and full fiscal year 2025, with a 29% year-over-year revenue growth in Q4 and a 31% increase for the full year. The company highlighted significant demand from enterprise customers and announced the appointment of Ian Steward as Chief Revenue Officer, effective May 3, 2025, and David Henshall to its board of directors. These developments underscore GitLab’s strategic positioning as a trusted partner in the DevSecOps space, leveraging AI to meet complex software demands.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.