Another day, another IPO that has the folks over on Wall Street all in a flutter.
GitLab (NASDAQ: GTLB), the pretender to GitHub’s ‘Git’ throne, made its public debut on Thursday and has seen its stock price soar.
But is GitLab a good buy yet?
First off, do you know what ‘Git’ is?
Git is software for tracking changes in any set of files, usually used for coordinating work among programmers collaboratively developing source code during software development.
Let’s move on to GitLab, which saw its stock price soar 35% when it debuted on Thursday, followed by another jump on Friday. This left it with a share price of $115 apiece and an estimated market cap of $16.5 billion — a far cry from the $66 per share it initially planned.
Why the hype though?
Well, GitLab fits the mold of the classic high-growth, unprofitable business-to-business software provider that investors seem to love so much these days. In fact, it is so loved that it is now worth more than twice as much as what Microsft paid to acquire its nearest competitor, GitHub.
On the one hand, it has the advantage of not being owned by Microsoft, meaning that the latter’s competitors will gravitate towards it for Git offerings. On the other hand, Microsoft is as big as it gets, and can easily undercut GitLab’s prices.
As for financials, a first glance looks good as revenue in the latest quarter climbed 69% to $58.1 million. However, we’ll also see that losses widened to $40.2 million from $9.4 million a year before due to sales and marketing costs, while total losses for the past year exceeded $200 million.
It’s very early days yet, but be sure to keep an eye on MyWallSt for a First Look at GitLab from our analyst team.
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Editor at MyWallSt
Jamie is the Content Editor here at MyWallSt. His favorite stock is Apple, which is also the first stock he ever bought. Jamie is not only a big fan of its products, but he believes that the tech giant has a whole lot more to give the world, and hasn't even scraped the surface of its potential.