- United States
GitLab (NASDAQ:GTLB shareholders incur further losses as stock declines 32% this week, taking one-year losses to 21%
The simplest way to benefit from a rising market is to buy an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Investors in GitLab Inc. (NASDAQ:GTLB) have tasted that bitter downside in the last year, as the share price dropped 21%. That's disappointing when you consider the market declined 10%. GitLab hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. On top of that, the share price is down 32% in the last week. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.
Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.
View our latest analysis for GitLab
Given that GitLab didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
In the last year GitLab saw its revenue grow by 68%. That's well above most other pre-profit companies. Given the revenue growth, the share price drop of 21% seems quite harsh. Our sympathies to shareholders who are now underwater. Prima facie, revenue growth like that should be a good thing, so it's worth checking whether losses have stabilized. Our brains have evolved to think in linear fashion, so there's value in learning to recognize exponential growth. We are, in some ways, simply the wisest of the monkeys.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
GitLab is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
We doubt GitLab shareholders are happy with the loss of 21% over twelve months. That falls short of the market, which lost 10%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. It's worth noting that the last three months did the real damage, with a 30% decline. So it seems like some holders have been dumping the stock of late - and that's not bullish. It's always interesting to track share price performance over the longer term. But to understand GitLab better, we need to consider many other factors. To that end, you should be aware of the 4 warning signs we've spotted with GitLab .
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
Valuation is complex, but we're helping make it simple.
Find out whether GitLab is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
GitLab Inc., through its subsidiaries, develops software for the software development lifecycle in the United States, Europe, and the Asia Pacific.
Excellent balance sheet with limited growth.