What To Expect From GitLab’s (GTLB) Q1 Earnings

Radek Strnad /
2022/06/05 9:18 am EDT
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Software development tools maker GitLab (NASDAQ:GTLB) will be reporting earnings tomorrow after market close. Here's what investors should know.

Last quarter GitLab reported revenues of $77.7 million, up 68.5% year on year, beating analyst revenue expectations by 10.6%. It was a very strong quarter for the company, with an impressive beat of analyst estimates and an exceptional revenue growth.

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 44.6% year on year to $78.1 million, slowing down from the 69.1% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.26 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 since going public on average by 11.7%.

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. JFrog delivered top-line growth of 41.2% year on year, beating analyst estimates by 4.16% and Cloudflare reported revenues up 53.6% year on year, exceeding estimates by 3.16%. JFrog traded up 1.67% on the results, and Cloudflare was flat on the results. Read our full analysis of JFrog's results here and Cloudflare's results here.

Tech stocks have been facing declining investor sentiment in 2022 and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 2.36% over the last month. GitLab is down 12.4% during the same time, and is heading into the earnings with analyst price target of $69.4, compared to share price of $41.38.

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.