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Here's Why GitLab Inc. (GTLB) Fell More Than Broader Market

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The most recent trading session ended with GitLab Inc. (GTLB - Free Report) standing at $57.07, reflecting a -1.79% shift from the previouse trading day's closing. The stock's change was less than the S&P 500's daily loss of 1.46%. Elsewhere, the Dow lost 1.24%, while the tech-heavy Nasdaq lost 1.63%.

Shares of the company have appreciated by 6.1% over the course of the past month, outperforming the Computer and Technology sector's gain of 3.33% and the S&P 500's gain of 1.6%.

Analysts and investors alike will be keeping a close eye on the performance of GitLab Inc. in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be -$0.04, reflecting a 33.33% increase from the same quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $165.66 million, up 30.56% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates project earnings of $0.21 per share and a revenue of $729.36 million, demonstrating changes of +5% and +25.77%, respectively, from the preceding year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for GitLab Inc. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Within the past 30 days, our consensus EPS projection remained stagnant. GitLab Inc. is currently sporting a Zacks Rank of #3 (Hold).

With respect to valuation, GitLab Inc. is currently being traded at a Forward P/E ratio of 283.46. For comparison, its industry has an average Forward P/E of 29.1, which means GitLab Inc. is trading at a premium to the group.

One should further note that GTLB currently holds a PEG ratio of 11.88. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The average PEG ratio for the Internet - Software industry stood at 1.87 at the close of the market yesterday.

The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 33, positioning it in the top 14% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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