Tuesday, Bernstein adjusted its price target on shares of GitLab Inc (NASDAQ:GTLB), reducing it to $70 from the previous $74, while maintaining an Outperform rating.
The revision follows GitLab's first quarter fiscal year 2025 report, which showed continued momentum in its subscription business. The company achieved a year-over-year growth of 36%, marking the third consecutive quarter of accelerating growth, compared to 35% in the previous quarter and 33% in the one before that.
The growth has been attributed to several factors, including robust seat-based growth, positive impacts from pricing increases, and a notable rise in revenue from GitLab's Ultimate tier, which reached a new high, accounting for 46% of total revenue, up from 44% last quarter.
Despite facing challenges in revenue recognition within its license business and the typical annual weakness of the quarter, GitLab managed to report an overall revenue growth of 33% year-over-year. This performance was approximately 2% higher than the guidance and consensus estimates.
Investors and stakeholders in GitLab Inc can take note of the company's sustained growth in subscription revenue and the increasing significance of its Ultimate tier. As the company navigates through revenue recognition challenges and seasonal fluctuations, its performance continues to exceed industry expectations, reinforcing its competitive edge in the sector.
InvestingPro Insights
As GitLab Inc (NASDAQ:GTLB) demonstrates a strong subscription growth trajectory, current real-time data from InvestingPro provides a deeper insight into the company's financial health. GitLab holds a market cap of approximately $7.48 billion, with a notable revenue growth of 36.66% in the last twelve months as of Q4 2024, underscoring its expanding market presence. The impressive gross profit margin of nearly 89.78% during the same period signals the company's efficiency in maintaining profitability amidst its growth.
InvestingPro Tips indicate that GitLab's stock is currently in oversold territory, which could suggest a potential rebound opportunity for investors. Additionally, the company's liquid assets surpass its short-term obligations, highlighting a strong liquidity position. For those seeking comprehensive analysis, InvestingPro offers an array of additional tips, with 19 more insights available that could help investors make informed decisions regarding GitLab's stock.
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