GitLab Earnings: What To Look For From GTLB

Kayode Omotosho /
2023/06/05 3:24 am EDT

Software development tools maker GitLab (NASDAQ:GTLB) will be announcing earnings results today after the bell. Here's what to look for.

Last quarter GitLab reported revenues of $122.9 million, up 58% year on year, beating analyst revenue expectations by 2.77%. It was a weak quarter for the company, with revenue guidance for the next quarter andĀ full year missing analysts' expectations.

Is GitLab buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting GitLab's revenue to grow 34.8% year on year to $117.8 million, slowing down from the 75.1% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.14 per share.

GitLab Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 8.62%.

Looking at GitLab's peers in the software development segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. Cloudflare delivered top-line growth of 36.8% year on year, missing analyst estimates by 0.22% and Agora reported revenue decline of 5.55% year on year, exceeding estimates by 0.54%. Cloudflare traded down 23.2% on the results, Agora was up 1.05%. Read our full analysis of Cloudflare's results here and Agora's results here.

There has been positive sentiment among investors in the software segment, with the stocks up on average 14.8% over the last month. GitLab is up 12.4% during the same time, and is heading into the earnings with analyst price target of $43.6, compared to share price of $33.95.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.