GitLab stock price forecast ahead of earnings: buy or sell?

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on Mar 2, 2024
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  • GitLab will publish its financial results on Monday next week.
  • Analysts expect that the company’s results will show that it is still growing.
  • GitLab and peers like GitHub have become strong AI stocks.

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GitLab (NASDAQ: GTLB) stock price has done well this year. Up by over 16%, it has outperformed the Nasdaq 100 and S&P 500 indices. It is also nearing its highest point since February 2022. It has also surged by more than 180% from its lowest point in 2023, bringing its total market cap to over $11 billion.

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GitLab as an AI play

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GitLab is one of the biggest and most important companies in the world yet most people have never heard about it. The company’s platform is used by thousands of software developers from companies like T-Mobile, AirBus, Lockheed Martin, and Nvidia.

The platform is used in all phases of the software development lifecycle. It is used to plan, create, verify, secure, package, deploy, monitor, and govern. It competes with the likes of GitHub, which was acquired by Microsoft in a $7.5 billion deal.

GitLab has become highly important in the era of artificial intelligence (AI). Its DevSecOps platform is used by developers who are creating AI software and applications. 

Therefore, analysts, including Jim Cramer, believe that the company will publish strong financial results next week.

The expectation is that GitLab’s revenue jumped to over $158 million in the final quarter of the year. If this happens, it will be higher than the $149 million that it made in the third quarter. It will also be higher than the $122 million it made in the same quarter in 2022.

GitLab has a good record of beating analysts’ estimates. It has beaten estimates on revenue and earnings in the past seven quarters straight. Most importantly, it has a good record of delivering conservative but positive forward guidance.

The most recent results showed that the company’s revenue rose by 32% to $149.7 million as the number of important customers jumped. In all, it had 8,100 customers with an ARR of at least $5,000. These customers represent over 90% of its revenue.

GitLabs also boosted its forward revenue guidance. It now expects that its annual revenue will be between $573 million and $574 million, representing a 35% revenue growth rate. 

GitLab stock price forecast

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GitLab stock

GTLB chart by TradingView

Turning to the weekly chart, we see that the GTLB stock price formed an inverse head and shoulders pattern. In most periods, this is one of the most popular bullish signs in the market. It has now moved above the neckline of this pattern.

GitLab shares have moved above the 38.2% Fibonacci Retracement level. They have also remained above all moving averages, which is a positive sign. Therefore, the outlook for the stock is bullish, with the next point to watch being the 50% retracement level at $81.40.

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