GitLab Stock Gains 10% on 'Strong' Results and Guidance

© Reuters.

By Senad Karaahmetovic

Shares of Gitlab (NASDAQ:GTLB) are up more than 10% in premarket trading after the company reported better-than-expected Q1 revenue and issued an upbeat Q2 and full-year forecast.

Gitlab reported a Q1 adjusted loss per share of 17c, while analysts were expecting a loss per share of 27c. Revenue came in at $87.4 million, topping the consensus estimates of $77.7 million. The first-quarter gross margin stood at 90%.

The company expects a Q2 adjusted loss per share in the range of 23c to 24c, compared to the analyst consensus of 25c per share. GTLB expects Q2 revenue in the range of $93.5 million to $94.5 million, beating the consensus projection of $90.4 million.

On a full-year basis, Gitlab expects an adjusted loss per share of 89c to 93c, compared to the previously forecasted loss per share of 97c to $1.02, while analysts were looking for a loss per share of 98c.

RBC Capital Markets analyst Matthew Hedberg hiked the price target to $66.00 per share from $64.00 on the Outperform-rated stock.

“The company reported a strong start to the year as execution continued in its third quarter as a public company. Revenue growth again accelerated to +75% vs. +69% last quarter while RPO grew +92% paired with significant margin expansion. Guidance moves higher for both revenue and margins as management remains bullish on their opportunity and pipeline,” Hedberg said in a client note.

Bank of America analyst Koji Ikeda also hiked the price target to $66.00.

“The key highlight, in our view, is the 12% revenue beat above the high-end of the guide which was higher than the F4Q22 magnitude (e.g. 10%), a salient data point that the GitLab DevSecOps platform story is resonating, and there is good visibility in the revenue model,” Ikeda told clients in a note.