BTIG has adjusted its outlook on GitLab Inc (NASDAQ: GTLB), raising the price target to $63 from $58, while retaining a Buy rating on the stock.
The firm's decision came in response to GitLab's robust second fiscal quarter performance and the company's enhanced forecast for fiscal year 2025.
GitLab reported an impressive quarterly revenue of $182.6 million, marking a 30.8% increase year-over-year, surpassing both BTIG's projection of $176.8 million and the Street's estimate of $176.9 million.
The software company also excelled in operating income, earnings per share (EPS), and free cash flow (FCF), outperforming expectations.
Additionally, GitLab has revised its revenue outlook for FY25 to a midpoint of $743 million, which is a 28% increase from the previous forecast of $735 million. This update overtakes the prior Street estimate of $736.7 million.
BTIG highlighted this as an exceptional quarter, noting the significant improvement in key performance metrics such as billings, remaining performance obligations (RPO), current remaining performance obligations (CRPO), and bookings.
The second fiscal quarter saw CRPO bookings accelerate to a 48% year-over-year growth, up from 22% in the previous quarter, marking the strongest performance in over 18 months. GitLab's shift towards its higher-priced Ultimate tier, significant enterprise Duo wins, and the dedicated GTLB offering were also cited as positive developments.
In other recent news, KeyBanc maintained an Overweight rating and a $62.00 price target, while BofA Securities revised its price target downward to $66 from $80. TD Cowen and Mizuho also reduced their targets to $58 from $76 and $62 respectively.
Despite these changes, all firms maintained positive ratings on the stock, indicating continued confidence in the company's prospects.
GitLab's F2Q25 results are eagerly anticipated, with an analyst forecast of $176.5 million in total revenue, marking a 26.5% year-over-year growth. This comes as GitLab confirmed its Q2 and FY 2025 guidance, projecting Q2 revenues between $176.0 million and $177.0 million, and fiscal year revenues between $733.0 million and $737.0 million.
InvestingPro Insights
As GitLab Inc (NASDAQ:GTLB) garners positive attention from BTIG with an upgraded price target and a Buy rating, it’s worth taking a closer look at the company through the lens of InvestingPro data and tips. GitLab boasts a strong balance sheet with more cash than debt, a factor that could provide financial flexibility and stability going forward. Additionally, the company's gross profit margins are impressive, standing at 89.63% over the last twelve months as of Q1 2025, highlighting its ability to efficiently manage costs relative to revenue.
Despite not being profitable over the last twelve months, analysts have revised their earnings upwards for the upcoming period, suggesting optimism about GitLab's future profitability. This aligns with the company's robust revenue growth of 34.15% over the same period. However, investors should note that the stock has experienced a significant decline over the last six months, with a price total return of -40.0%, potentially indicating market skepticism or broader sector challenges.
For those interested in a deeper dive, InvestingPro offers a comprehensive list of additional tips and metrics, including GitLab's revenue valuation multiple and Price / Book multiple, which stand at a high level as of the latest data. To explore further insights and analysis, visit InvestingPro at https://www.investing.com/pro/GTLB.
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