Group 1 - Moretus Research provides high-quality equity research focused on U.S. public markets, aiming to deliver clarity, conviction, and alpha for serious investors [1] - The research framework identifies companies with durable business models, mispriced cash flow potential, and intelligent capital allocation, emphasizing a structured and repeatable approach [1] - Valuation methods are based on sector-relevant multiples tailored to each company's business model and capital structure, prioritizing comparability, simplicity, and relevance [1] Group 2 - Research coverage focuses on underappreciated companies experiencing structural changes or temporary dislocations, where disciplined analysis can yield asymmetric returns [1] - Moretus Research aims to elevate the standard for independent investment research by providing professional-grade insights and actionable valuation [1]

Core Viewpoint - GitLab's stock has underperformed in 2023, with a year-to-date decline of 14.8%, contrasting with the broader technology sector's slight decline and significant gains from industry peers [1][2] Financial Performance - For fiscal 2026, GitLab anticipates revenues between $936 million and $942 million, reflecting a year-over-year growth rate of 24% [5] - The Zacks Consensus Estimate for fiscal 2026 revenues stands at $936.51 million, indicating a growth of 23.35% year-over-year [5] - Non-GAAP earnings for fiscal 2026 are projected to be between 68 and 72 cents per share, with a consensus estimate of 70 cents, suggesting a year-over-year decline of 5.41% [6] Market Position and Product Development - GitLab's comprehensive DevSecOps platform, supported by a robust product portfolio, is driving enterprise adoption and enhancing developer efficiency [7] - The GitLab Ultimate subscription now constitutes 50% of total annual recurring revenue, driven by its security and compliance features appealing to large enterprises [8] - GitLab Duo offers AI-powered development capabilities, including smart code suggestions and test automation, with the recent launch of GitLab 18 enhancing AI integration [9] Strategic Partnerships - GitLab's partnerships with major companies like Amazon and Alphabet are pivotal for its growth [10] - The collaboration with Amazon Web Services (AWS) includes the integration of GitLab Duo with Amazon Q, enhancing developers' ability to produce secure code efficiently [11] - Expanded integrations with Google Cloud have strengthened GitLab's platform capabilities, positioning the company for continued success in fiscal 2026 [12] Investment Outlook - GitLab's strong enterprise demand, rapid AI-driven innovation, and deepening cloud partnerships highlight its competitive edge and potential for sustained growth [13]

A bearish note in an otherwise bullish industry research report led to a bit of an investor sell-off in GitLab (GTLB -4.99%) stock on Monday. The specialized tech company's shares took a nearly 5% hit as a result, on a day when the S&P 500 index basically traded sideways.Sold on softwareThat report, published in the morning and authored by RBC Capital analyst Matthew Hedberg, was an update of notable software stocks in advance of scheduled quarterly earnings reports from companies in the segment. According ...

Core Insights - GitLab (GTLB) is a smaller SaaS company that may attract investors with high-risk tolerances due to its unique offerings and operational metrics [1] Group 1: Company Overview - GitLab specializes in software as a service (SaaS) and has a distinctive "special sauce" that differentiates it in the market [1] - The company is demonstrating effective execution in the realm of artificial intelligence, which is a key area of focus for its growth strategy [1] Group 2: Operational Metrics - The article highlights GitLab's operating metrics, indicating that the company is performing well and has potential for future growth [1]

Core Viewpoint - GitLab Inc. is positioned to potentially continue its earnings-beat streak in the upcoming report, having surpassed earnings estimates significantly in the last two quarters [1]. Earnings Performance - In the last reported quarter, GitLab achieved earnings of $0.33 per share, exceeding the Zacks Consensus Estimate of $0.23 per share, resulting in a surprise of 43.48% [2]. - In the previous quarter, the company was expected to post earnings of $0.16 per share but delivered $0.23 per share, leading to a surprise of 43.75% [2]. Earnings Estimates and Predictions - Estimates for GitLab have been trending higher, influenced by its history of earnings surprises, and the stock currently has a positive Zacks Earnings ESP of +1.70%, indicating bullish sentiment among analysts [5][8]. - The combination of a positive Earnings ESP and a Zacks Rank of 2 (Buy) suggests a strong possibility of another earnings beat [8]. Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [6]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [7].

I gave a buy rating to GitLab Inc. (NASDAQ: GTLB ) in December, with my key thesis being that the growth outlook is still strong. There was sufficient evidence to convince me that GTLB can continue to growI'm a passionate investor with a strong foundation in fundamental analysis and a keen eye for identifying undervalued companies with long-term growth potential. My investment approach is a blend of value investing principles and a focus on long-term growth. I believe in buying quality companies at a discou ...

Summary of Insider Transactions Analysis Industry Overview - The analysis covers insider transactions across various companies in the enterprise software sector, particularly focusing on small to mid-cap (SMID Cap) firms. Key Insights - **March 2025 Insider Transactions**: The total insider transaction value was over $900 million, with 97% being sell transactions and only 3% buy transactions, excluding transactions by >10% external shareholders [5][7] - **Sell Transactions**: 95% of sell transactions were not executed under Rule 10b5-1, which allows for pre-scheduled trades. This percentage drops to 94% when excluding sales made to satisfy tax obligations. After adjusting for Nutanix's share sales by Bain Capital, the percentage of non-10b5-1 sell transactions falls to 4% and 3% respectively [5][7] - **Buy Transactions**: All buy transactions in March were executed under Rule 10b5-1, indicating a structured approach to buying shares by insiders [5][7] Notable Transactions - **Asana (ASAN)**: CEO Dustin Moskovitz purchased 1.8 million shares worth $25.6 million, holding 37.23% of total shares outstanding [5][7] - **C3.ai (AI)**: CEO Tom Siebel sold 639,000 shares valued at $13.9 million, owning 5.5% of total shares outstanding [5][7] - **Elastic (ESTC)**: CEO Ashutosh Kulkarni sold approximately 24,000 shares for $2.2 million, while co-founder Shay Banon sold around 203,000 shares for $21.9 million, with most sales not under 10b5-1 [5][7] - **GitLab (GTLB)**: Director Matthew Jacobson sold 153,000 shares worth $8 million, not under 10b5-1 [5][7] - **Nutanix (NTNX)**: Bain Capital sold 11 million shares valued at $819.6 million, not under 10b5-1, related to the conversion of convertible notes [5][7] - **Sprinklr (CXM)**: Director Neeraj Agrawal sold 26,000 shares for $242,000, not under 10b5-1 [5][7] Year-to-Date (YTD) Insights for 2025 - **Total Transactions**: The aggregate insider transaction value for the year was $1.1 billion, with 98% being sell transactions and 2% buy transactions [7] - **Sell Transactions**: 77% of sell transactions were not executed under 10b5-1, dropping to 76% when excluding tax-related sales. Adjusting for Nutanix's sales, this number falls to 3% [7] - **Buy Transactions**: All buy transactions executed in 2025 were under 10b5-1 [7] Additional Noteworthy Transactions - **Asana (ASAN)**: Co-founder Justin Rosenstein sold 1.35 million shares for $27.9 million, with ownership declining from 1.53% to 0.57% [7] - **Elastic (ESTC)**: Similar patterns of non-10b5-1 sales were observed among executives [7] - **Nutanix (NTNX)**: Continued significant sales by Bain Capital [7] - **Sprinklr (CXM)**: Multiple executives sold shares not under 10b5-1 [7] Conclusion - The analysis indicates a trend of significant insider selling across the covered companies, with a notable lack of buy transactions, suggesting potential caution among insiders regarding future performance. The structured nature of buy transactions under Rule 10b5-1 may reflect strategic planning by insiders amidst market uncertainties.

Core Viewpoint - GitLab's share price has declined significantly due to increasing competition in the AI-driven code generation market, particularly from Microsoft's GitHub, alongside macroeconomic challenges and a shift towards agentic AI capabilities [1][2][3]. Company Performance - GitLab shares have lost 27.1% year to date, underperforming the broader Zacks Computer & Technology sector's 21% decline and the Zacks Internet Software industry's 18.3% drop [1]. Competitive Landscape - The competition in the AI-driven code generation space is intensifying, with GitHub's AI-powered coding assistant, GitHub Copilot, gaining traction and reinforcing Microsoft's dominance in the developer tools market [2]. - Persistent macroeconomic headwinds and the rapid shift towards agentic AI capabilities present growing challenges for GitLab [3]. Product Strengths - GitLab's robust DevSecOps platform, including GitLab Ultimate, GitLab Dedicated, and GitLab Duo, has driven customer adoption and retention, enhancing security, scalability, and AI-driven automation [4]. - GitLab Ultimate, the flagship product, accounted for 50% of the company's Annual Recurring Revenues as of the fourth quarter of fiscal 2025, highlighting its importance in revenue growth [6]. - The introduction of GitLab Duo, an AI-powered assistant, aims to improve software development workflows and developer productivity [7]. Innovation and Development - GitLab's Duo Workflow product, which focuses on AI-driven software development, entered private beta in the fourth quarter of 2024, leveraging Generative AI to enhance the software development lifecycle [8]. Strategic Partnerships - GitLab's partnerships with leading cloud providers, including Amazon Web Services and Zscaler, enhance the platform's scalability and deployment capabilities, strengthening its competitive position in the DevSecOps market [9]. - The integration of GitLab Duo with Amazon Q aims to improve AI-driven DevSecOps on AWS, enhancing security and efficiency [10]. Future Outlook - Despite challenges such as rising competition and cautious enterprise spending, GitLab's strong AI-driven DevSecOps platform, strategic partnerships, and growing enterprise adoption support long-term growth [11].

Group 1 - The article expresses the author's personal views and indicates a potential interest in initiating a long position in GTLB within the next 72 hours [1] - The information provided is for educational purposes only and does not constitute an offer to sell or buy any securities [2] - The author does not guarantee the accuracy of the information derived from third-party sources [2]

Financial Performance - Total revenue for the fiscal year ended January 31, 2025, was $759.2 million, representing a growth rate of 31% compared to $579.9 million in the previous year[108]. - The company incurred net losses of approximately $6.3 million, $425.7 million, and $173.4 million in fiscal years 2025, 2024, and 2023, respectively, with an accumulated deficit of approximately $1.2 billion as of January 31, 2025[113]. - A significant portion of the company's revenue is recognized from subscriptions over the term of the relevant subscription period, meaning downturns in sales may not be immediately reflected in financial results[229]. - Operating results may fluctuate significantly, making future results difficult to predict, which could adversely affect the trading price of the company's Class A common stock[153]. - The renewal rates of subscriptions may fluctuate, impacting revenue stability and growth potential[159]. Customer Base and Market Dynamics - The total number of Base Customers increased to 9,893 as of January 31, 2025, up from 8,602 as of January 31, 2024[106]. - Future revenue growth may be impacted by factors such as increased competition, changes in technology, and global economic conditions[110]. - The market for the company's services is relatively new and rapidly evolving, making it difficult to predict customer adoption and demand[144]. - The company may face challenges in selling additional subscriptions and services to current customers, which could lead to revenue declines[149]. - The company has discontinued certain lower-priced product offerings, which may lead to slower revenue growth or decline if customers do not switch to paid offerings or the free product[152]. Competition and Industry Challenges - The company faces intense competition in the software market, which could adversely affect its business and financial condition[126]. - Competitors include well-established providers like Microsoft and Atlassian, as well as new entrants and companies from adjacent markets[127]. - Many competitors have greater financial and technical resources, which may allow them to respond more quickly to market changes and customer preferences[130]. - Pricing pressures from competitors could lead to reduced sales and margins, negatively impacting operating results[131]. - The company may struggle to keep pace with rapid technological changes, which could adversely affect its operating results[133]. Operational and Strategic Initiatives - The company anticipates increases in operating expenses as it continues to invest in research and development, sales and marketing, and international expansion[113]. - The company plans to expand its product development team and enhance The DevSecOps platform, including AI capabilities[113]. - The company plans to expand its marketing and sales capabilities to target larger organizations, but success is not guaranteed and may divert resources from existing customer maintenance[174]. - The company relies on effective sales and marketing strategies to drive revenue growth, and any decline in customer renewals could harm future operating results[146]. - Channel partners are crucial for sales, particularly in enterprise and international markets, and maintaining successful relationships with them is essential for revenue growth and profitability[180]. Regulatory and Compliance Risks - The company processes personal data, which subjects it to stringent governmental regulations and potential liabilities for non-compliance[202]. - The GDPR and U.K. GDPR impose penalties for non-compliance of up to €20 million or 4% of worldwide annual revenues[205]. - The company is required to comply with the California Consumer Privacy Act (CCPA), which increases privacy rights for California consumers and imposes new obligations[210]. - The company faces potential regulatory investigations and reputational damage due to privacy and data security law violations[207]. - The company faces risks related to compliance with anti-bribery and anti-corruption laws, which could result in significant penalties and harm its reputation[219]. Financial Position and Capital Management - As of January 31, 2025, the company had $992.4 million in cash, cash equivalents, and short-term investments, down from $1.0 billion as of January 31, 2024[407]. - The company's cash equivalents and short-term investments primarily consist of money market funds, treasuries, corporate debt securities, and commercial paper, totaling $898.3 million as of January 31, 2025[407]. - The company may need to raise additional capital for growth, which could be on unfavorable terms, potentially diluting existing stockholders[265]. - The market price of the company's Class A common stock may be volatile, influenced by various external factors[277]. - The company may incur substantial costs and management distraction from potential stockholder activism or securities litigation[280]. International Operations and Currency Risks - The company has direct and indirect subsidiaries in 13 countries and team members in over 60 countries, indicating a strong international presence[247]. - The company is exposed to fluctuations in currency exchange rates, which could negatively affect its financial results as revenue is primarily billed in U.S. dollars[255]. - The company has not engaged in currency hedging activities, increasing its vulnerability to exchange rate fluctuations[255]. - A hypothetical 10% change in foreign currency exchange rates would materially impact the consolidated financial statements[409]. - The company’s consolidated results are subject to fluctuations due to changes in foreign currency exchange rates[408]. Management and Governance - The company has appointed a new CEO, which may result in additional volatility in stock price and could disrupt operations[233]. - The dual class structure of the company's common stock allows Class B shareholders to control a majority of the voting power, limiting the influence of Class A shareholders[283]. - Provisions in the company's organizational documents may make it difficult for shareholders to effect a change in management or control[290]. - The company is subject to the reporting requirements of the Sarbanes-Oxley Act, necessitating significant resources for maintaining effective internal controls[257]. - A material weakness in internal control over financial reporting (ICFR) was identified, specifically related to IT general controls affecting revenue reporting[259].