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Although the company reported solid topline growth in its fiscal third-quarter results, its bottom line remained bleak. GTLB’s revenue came in at $66.80 million, up 58% year-over-year. However, its net loss increased 12.6% year-over-year to $41.20 million. The company expects to generate revenue of $69.50 – $70.50 million in the current quarter, while its net loss per share is expected to be around $0.26 – $0.25. “We are pleased with our dollar-based net retention of over 130% and the positive business outcomes we continue to drive for our customers across all verticals around the world. The market for DevOps platforms is underpenetrated, and as a pioneer of The DevOps Platform, GitLab is well-positioned to make the most of the substantial market opportunity before us,” according to GitLab CEO, Brian Robins.
However, following its third-quarter earnings release, Piper Sandler analyst Rob Owens lowered GTLB’s price target to $100 from $120 while maintaining a Hold rating. Also, Cowen & Co. analyst Derrick Wood reduced the price target to $130 from $145. Furthermore, the company’s current valuation does not justify its underlying fundamentals, putting its valuation metrics at astronomical levels. And its beta of 1.61 indicates high volatility.
