Software development tools maker GitLab (NASDAQ:GTLB) will be reporting earnings tomorrow after market hours. Here’s what to look for.
GitLab beat analysts’ revenue expectations by 4.3% last quarter, reporting revenues of $196 million, up 31% year on year. It was a strong quarter for the company, with EPS guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.
Is GitLab a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting GitLab’s revenue to grow 25.9% year on year to $206.2 million, slowing from the 33.3% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.23 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. GitLab has missed Wall Street’s revenue estimates twice over the last two years.
Looking at GitLab’s peers in the software development segment, some have already reported their Q4 results, giving us a hint as to what we can expect. JFrog delivered year-on-year revenue growth of 19.3%, beating analysts’ expectations by 1.5%, and F5 reported revenues up 10.7%, topping estimates by 7.2%. JFrog traded up 5.5% following the results while F5 was also up 11.4%.
Read our full analysis of JFrog’s results here and F5’s results here.
Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good 2024. An economic soft landing (so far), the start of the Fed’s rate cutting campaign, and the election of Donald Trump were positives for the market, and while some of the software development stocks have shown solid performance, the group has generally underperformed, with share prices down 7.8% on average over the last month. GitLab is down 14.6% during the same time and is heading into earnings with an average analyst price target of $79.95 (compared to the current share price of $60.39).
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