GTLB - GitLab started with peer perform rating at Wolfe Research on AI hopes

2023-06-20 09:08:43 ET

Investment firm Wolfe Research started coverage on DevOps company GitLab ( NASDAQ: GTLB ) on Tuesday with a peer perform rating, noting the company is "laser focused" on putting AI across its platform.

Analyst Allan Verkhovski said GitLab ( GTLB ) has sent out more than 140 consecutive monthly updates to its platform, with more than 10 AI features and an AI SKU coming later this year, which could generate as much as $73M in revenue in fiscal 2026.

"Differentiation stems from offering an end-to-end DevSecOps platform with more horsepower for developers and a more comprehensive security offering than its competitors/GitHub," Verkhovski wrote in an investor note. "While our diligence indicates that fully consolidating onto GTLB can be challenging, their revenue growth trajectory points to strong customer affinity for GTLB’s solutions."

Verkhovski added that GitLab ( GTLB ) could have a compound annual growth rate of 36% over the next three years as it continues to focus on AI, along with recent price increases for its subscriptions, including the Premium Tier.

While the analyst said generative AI may not result in an expansion of seats for GitLab ( GTLB ) it's likely to be a beneficiary from AI as it has a "tangible plan for monetization."

More on GitLab

• GitLab: Looking At Its Growth Potential In An Era Of Generative AI
• GitLab leads Tech with 33% gain after beat-and-raise in Q1
• GitLab Inc. Q1 2024 Earnings Call Transcript

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