Key Takeaways Five9 gains from rising AI adoption in contact centers and new integrations with Google Cloud.TaskUs expands agentic AI consulting through new partnerships, driving double-digit growth rates. Workday, GitLab and BILL Holdings show earnings estimate upgrades, signaling continued AI-driven momentum.The artificial intelligence (AI)-driven astonishing bull run of 2023 and 2024 has continued in 2025 too. With just two months to close this year, the AI infrastructure developers are set to witness an ...

Core Viewpoint - The article suggests that there are opportunities in undervalued stocks that are mispriced by the market as October begins [1]. Group 1 - The article encourages readers to consider joining a service that focuses on identifying these undervalued stocks [1].

Core Viewpoint - GitLab Inc. (NASDAQ:GTLB) has seen a significant increase in share prices, rising by 10.6% to $48.27, driven by acquisition interest from DataDog Inc. [1][2] Company Performance - GitLab's share price surged due to reports of a potential acquisition by DataDog, with an offer price speculated to be around $60 per share [2] - The company currently has 50 million registered users and claims that over 50% of Fortune 100 companies utilize its platform for software security [4] Company Overview - GitLab is an AI-powered Development, Security, and Operations platform that enhances developer productivity, operational efficiency, and reduces security risks [3]

Core Insights - GitLab's stock rose by 10.6% following speculation of a takeover bid from Datadog at $60 per share, but the stock is considered unattractive at its current price of approximately $48 due to high valuation relative to fundamentals [2][11] Financial Performance - GitLab's revenues have grown significantly, with a 29.0% increase over the last 12 months, rising from $665 million to $858 million, and an average growth rate of 37.4% over the past three years [7] - The company has a price-to-sales (P/S) ratio of 9.1, compared to 3.2 for the S&P 500, and a price-to-free cash flow (P/FCF) ratio of 217.4 versus 20.7 for the S&P 500 [7] - GitLab's operating income over the past four quarters was -$101 million, resulting in an operating margin of -11.8%, while the S&P 500 has an operating margin of 18.6% [13] - The net income for GitLab was -$9.7 million, indicating a net income margin of -1.1%, compared to 12.7% for the S&P 500 [13] Financial Stability - GitLab's balance sheet is robust, with no debt and a market capitalization of $8.0 billion, resulting in a debt-to-equity ratio of 0.0% [13] - Cash and cash equivalents amount to $1.2 billion, constituting 77.8% of total assets of $1.5 billion, compared to 7.0% for the S&P 500 [13] Market Resilience - GitLab's stock has underperformed the S&P 500 during recent downturns, with a decline of 79.5% from its peak of $130.88 on November 8, 2021, to $26.77 on May 4, 2023, while the S&P 500 experienced a peak-to-trough drop of 25.4% [14] - The stock has not yet returned to its pre-crisis high, with its highest value since then being $77.60 on February 11, 2024 [14] Overall Assessment - GitLab's overall operating and financial condition is assessed as moderate, with very strong growth, very weak profitability, very strong financial stability, and very weak downturn resilience [14]

Company Overview - GitLab Inc. (GTLB) shares increased by 10.6% to close at $48.27, following a notable trading volume that exceeded typical levels, contrasting with a 13.5% loss over the past four weeks [1] - The company is experiencing strong enterprise demand for its AI-native DevSecOps platform, driven by the increasing need for secure, efficient, and scalable software development solutions [1] Earnings Expectations - GitLab is projected to report quarterly earnings of $0.20 per share, reflecting a year-over-year decline of 13%, while revenues are expected to reach $238.61 million, marking a 21.7% increase from the same quarter last year [2] - The consensus EPS estimate for GitLab has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [3] Industry Context - GitLab belongs to the Zacks Internet - Software industry, which includes other companies like MongoDB (MDB), that closed 1.1% lower at $314.35, with a 0.8% return over the past month [3] - MongoDB's consensus EPS estimate for its upcoming report is $0.78, representing a 32.8% decrease from the previous year, and it also holds a Zacks Rank of 1 (Strong Buy) [4]

Key Points The niche software specialist apparently has a peer willing to acquire it. According to a report in financial media, that would-be buyer is attempting to arrange financing for a deal. 10 stocks we like better than GitLab › The stock of software development, security, and operations company GitLab (NASDAQ: GTLB) saw a sudden blast of investor interest Thursday. Thanks to the resulting share price spike as the market barreled to a close the day, the tech company's share price ended up risi ...

Group 1 - GitLab (NASDAQ: GTLB) is identified as a high-growth software company that is trading at reasonable valuations despite a heated tech market [1] - Investor concerns are noted regarding potential disruptions from generative AI, although management remains optimistic [1] - The investment strategy highlighted involves seeking undervalued companies with strong balance sheets and management teams in sectors with long growth potential [1] Group 2 - The investing group led by Julian focuses on stocks with a high probability of delivering significant alpha compared to the S&P 500 [1] - The group combines growth-oriented principles with strict valuation criteria to enhance the margin of safety [1] - Features of the investment group include exclusive access to high-conviction stock picks, comprehensive research reports, real-time trade alerts, and macro market analysis [1]

Core Viewpoint - Adobe and GitLab shares experienced a decline in early trading due to concerns from investment firm Mizuho regarding a "severe negative impact" from artificial intelligence on the market [2] Company Summary - Adobe is positioned at the intersection of creative software and generative AI, indicating its involvement in both traditional creative tools and emerging AI technologies [2]

Core Insights - Zacks Premium provides tools for investors to enhance their stock market engagement and confidence, including daily updates, research reports, and stock screens [1][2] Zacks Style Scores - Zacks Style Scores rate stocks based on value, growth, and momentum, serving as complementary indicators to the Zacks Rank, helping investors identify securities likely to outperform the market in the short term [3][4] - Each stock receives a rating from A to F, with A indicating a higher likelihood of outperformance [4] Value Score - The Value Style Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales [4] Growth Score - The Growth Style Score assesses a company's financial health and future outlook based on projected and historical earnings, sales, and cash flow [5] Momentum Score - The Momentum Style Score identifies optimal times to invest based on price trends and earnings estimate changes [6] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors seeking attractive value, growth, and momentum [7] Zacks Rank - The Zacks Rank is a proprietary model that utilizes earnings estimate revisions to guide investors in building successful portfolios [8] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +23.81% since 1988, significantly outperforming the S&P 500 [9] Stock Selection Strategy - To maximize returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [10] - Stocks with lower ranks, even with good Style Scores, may still face downward price pressure due to negative earnings outlooks [11] Company Spotlight: GitLab Inc. (GTLB) - GitLab is a leading provider of a DevSecOps platform, currently rated 3 (Hold) with a VGM Score of B [12] - The company has a strong Momentum Style Score of A, with shares increasing by 2.6% over the past four weeks [12] - Analysts have revised GitLab's earnings estimate upwards, with the Zacks Consensus Estimate rising by $0.08 to $0.83 per share, and an average earnings surprise of +37.6% [13]

Core Insights - GitLab's recent earnings report showed strong performance, with shares increasing by approximately 7% since the last report, outperforming the S&P 500 [1] - The company reported non-GAAP earnings of 24 cents per share for Q2 fiscal 2026, exceeding estimates by 50%, and total revenues of $236 million, a 29.2% year-over-year increase [2] Financial Performance - Subscription revenues, which include self-managed and SaaS, accounted for 90.1% of total revenues, rising 30.3% year over year to $212.7 million [3] - SaaS revenues specifically surged 39% year over year, driven by strong adoption of GitLab Dedicated and AI integration [3] - Customers with over $5K in Annual Recurring Revenue (ARR) increased by 11% to 10,338, while those with over $100K in ARR rose by 25% to 1,344 [4] - The dollar-based Net Retention Rate was reported at 121% [4] Operating Expenses - Non-GAAP research and development expenses increased by 16.8% year over year to $52.3 million, while sales and marketing expenses rose by 15.5% to $89.6 million [5] - General and administrative expenses increased by 20.7% year over year to $30.2 million, resulting in an operating income of $39.6 million compared to a loss of $18.2 million in the previous year [5] Balance Sheet and Cash Flow - As of July 31, 2025, GitLab had cash and cash equivalents of $1.16 billion, up from $1.10 billion in April 2025 [6] - The company generated a cash flow from operations of $49.4 million, a significant improvement from an operating cash outflow of $106.3 million in the previous quarter [6] Guidance - For Q3 fiscal 2026, GitLab expects revenues between $238 million and $239 million, indicating approximately 23% year-over-year growth [8] - The company anticipates non-GAAP operating income of $31-$32 million and earnings per share between 19 cents and 20 cents [8] - For the full fiscal year 2026, GitLab projects revenues between $936 million and $942 million, reflecting a growth of approximately 24% year over year [8][9] Market Sentiment - There has been a positive trend in estimates revisions, with the consensus estimate shifting by 25.19% in the past month [10] - GitLab currently holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [12] Industry Comparison - GitLab operates within the Zacks Internet - Software industry, where another player, BILL Holdings, reported a revenue increase of 11.5% year over year [13] - BILL Holdings has a Zacks Rank 3 (Hold) and a VGM Score of D, contrasting with GitLab's stronger growth score of A [11][14]