3 Gitlab Analysts React To Q4 Print As Stock Drops 28% On Tuesday

Zinger Key Points
  • Gitlab quarterly results and guidance are impacted by macro headwinds, one analyst said.
  • The guidance could prove conservative, another analyst stated.

Gitlab Inc GTLB reported a narrower-than-expected loss for the fourth quarter but announced a weak revenue outlook.

RBC Capital Markets On Gitlab

Analyst Matthew Hedberg maintained an Outperform rating, while reducing the price target from $60 to $45.

“Results were negatively impacted by macros as sales cycles elongated and some customers slowed hiring and/or reduced headcount, resulting in lower NRR and creating an uptick in contractions and churn,” Hedberg said in a note.

The company’s fiscal 2024 revenue guidance was “well below expectations despite the Premium price increase while profitability was better,” the analyst stated. The guidance factors in macro headwinds in the back half of the year, he added.

Check out other analyst stock ratings.

Truist Securities On Gitlab

Analyst Joel Fishbein reiterated a Buy rating, while reducing the price target from $65 to $50.

The stock plummeted on disappointing guidance, despite the fourth-quarter beat, Fishbein said. “Management revised their FY24 revenue projection from +40% to 25%, as effects from the deteriorating macro produced acute headwinds during the quarter that have persisted into 1Q24,” he added.

“Near-term, the slowing macro has impacted their expansion motion where seat growth is a significant contributor, though we believe the long term fundamentals remain intact,” the analyst wrote. He added that the guidance could prove conservative.

Needham On Gitlab

Analyst Mike Cikos reaffirmed a Hold rating on the stock.

“Macro pressures had a material downdraft on results during December and January - resulting in elongated deal cycles, seat contraction and lower expansion,” Cikos wrote in a note.

“We expect investors to view guidance as de-risked,” the analyst said. “However, we are unlikely to receive confirmation until 1QFY24 earnings, and also believe investors have increased questions around the visibility of GitLab's Subscription model,” he added.

GTLB Price Action: Shares of Gitlab had declined by 28.10% to $32.07 at the time of publication Tuesday.

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Posted In: Analyst ColorEarningsNewsPrice TargetReiterationAnalyst RatingsMoversTrading IdeasExpert IdeasJoel FishbeinMatthew HedbergMike CikosNeedhamRBC Capital MarketsTruist Securities
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