Gitlab Inc. (NASDAQ: GTLB)

Sector: Technology Industry: Software - Infrastructure CIK: 0001653482
Market Cap 5.80 Bn
P/B 6.29
P/E -122.03
P/S 6.40
ROIC (Qtr) -12.11
Div Yield % 0.00
Rev 1y % (Qtr) 24.64
Total Debt (Qtr) 0.00
Debt/Equity (Qtr) 0.00

About

GitLab Inc., known by its ticker symbol GTLB, operates in the software development industry. The company has transformed the way software is developed and delivered through its innovative DevSecOps platform. This comprehensive solution integrates development, operations, IT, security, and business teams, enabling them to collaborate and deliver secure software more efficiently. GitLab's primary business activities revolve around its DevSecOps platform. This application offers a unified space for various teams to work together, ensuring a streamlined...

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Price action

Investment thesis

Bull case

  • Robust free cash flow of 242.31M exceeds capital expenditure of 8.01M by 30.25x, indicating strong organic growth funding capability.
  • Short-term investments of 980.08M provide solid 1.76x coverage of other current liabilities 556.62M, indicating strong liquidity.
  • R&D investment of 268.50M represents healthy 0.54x of deferred revenue 493.79M, indicating strong future innovation pipeline.
  • Short-term investments of 980.08M provide healthy 1.04x coverage of working capital 941.14M, indicating strong liquidity.
  • Robust R&D investment of 268.50M at 0.44x of SG&A 613.78M demonstrates strong commitment to innovation and future growth.

Bear case

  • Operating cash flow of 250.32M barely covers its investment activities of (236.18M), with a coverage ratio of -1.06, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (236.18M) provide weak support for R&D spending of 268.50M, which is -0.88x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 250.32M provides insufficient coverage of deferred revenue obligations of 493.79M, which is 0.51x, raising concerns about future service delivery capabilities.
  • Short-term investments of 980.08M significantly exceed cash reserves of 224.23M, which is 4.37x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • The company's operating cash flow of 250.32M shows concerning coverage of stock compensation expenses of 208.43M, with a 1.20 ratio indicating potential earnings quality issues.

Peer comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 3,563.59 Bn 33.97 12.13 60.56 Bn
2 ORCL Oracle Corp 561.87 Bn 36.43 9.21 124.39 Bn
3 PLTR Palantir Technologies Inc. 413.65 Bn 377.64 106.17 0.24 Bn
4 PANW Palo Alto Networks Inc 126.45 Bn 113.19 13.23 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 116.42 Bn -370.56 25.50 0.82 Bn
6 SNPS Synopsys Inc 86.06 Bn 64.60 12.20 14.29 Bn
7 NET Cloudflare, Inc. 62.78 Bn -609.27 31.18 3.50 Bn
8 FTNT Fortinet, Inc. 60.83 Bn 32.47 9.28 1.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 3.53 2.69
EV to Cash from Ops. EV/CFO 22.14 28.91
EV to Debt EV to Debt 0.00 19.83
EV to EBIT EV/EBIT -107.60 -9.95
EV to EBITDA EV/EBITDA -75.17 6.82
EV to Free Cash Flow [EV/FCF] EV/FCF 22.87 26.09
EV to Market Cap EV to Market Cap 0.95 0.36
EV to Revenue EV/Rev 6.12 -9.34
Price to Book Value [P/B] P/B 6.29 3.88
Price to Earnings [P/E] P/E -122.03 -10.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -0.30
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.71
Dividend per Basic Share Div per Share (Qtr) 0.00 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.68
Interest Coverage Interest Coverage 0.00 -14.20
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -172.76 -408.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 26.95 226.39
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.28
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 7.10 25.27
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 50.32 47.48
EBIT Growth (1y) % EBIT 1y % (Qtr) 54.69 20.13
EBT Growth (1y) % EBT 1y % (Qtr) 54.69 14.16
EPS Growth (1y) % EPS 1y % (Qtr) 9.38 67.50
FCF Growth (1y) % FCF 1y % (Qtr) 330.16 296.60
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 25.94 46.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.58 0.67
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.40 1.22
Current Ratio Curr Ratio (Qtr) 2.66 2.59
Debt to Equity Ratio Debt/Equity (Qtr) 0.00 -0.96
Interest Cover Ratio Interest Cover Ratio 0.00 -14.20
Times Interest Earned Times Interest Earned 0.00 -14.20
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -4.50 -548.16
EBIT Margin % EBIT Margin % (Qtr) -5.68 -199.84
EBT Margin % EBT Margin % (Qtr) -5.68 -607.20
Gross Margin % Gross Margin % (Qtr) 88.00 51.88
Net Profit Margin % Net Margin % (Qtr) -5.20 -610.00