Disclaimer:

Disclaimer: The blog posts and comments on this blog and posts on social networks are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is". The blog is stocks analysis and valuation, Bitcoin, Cryptocurrencies, Artificial Intelligence, AI, deep-learning focused. Independent, unbiased AI insights. Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blog posts on this blog and posts on social networks. Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blog post and posts on social networks! The blog is property of Wolfteam Ltd. www.wolfteamedge.com Respectfully yours, Petar Posledovich

Monday, December 20, 2021

GitLab's Cloud Built In Optionality


GitLab, the online code repository and collaboration platform is currently valued at approximately 12.4 billion USD.

Which makes GitLab extremely overvalued, at least according to most commonly accepted company valuation metrics, especially given the fact that GitLab made 66.80 million USD in revenue in the last reported quarter ending in October 2021, be it with a 58.47 % year on year growth.

However, GitLab's business model of cloud computing, cloud hosted software development possesses something known as optionality in finance. The ability of the stock price to make huge jumps, here the market assumes higher, based on the underlying business of Infrastructure as a Service, cloud based software development and collaboration of information technology teams.

Such young companies with high possible future growth are very difficult to value. Simply because their underlying business could prove revolutionary, change the world, achieve exponential growth and secure the leading companies in that particular industry enormous revenues and profits. Cases in point are online retail and cloud, Amazon Inc, online search and advertising, Alphabet, Google's producer and smartphones, Apple Inc, social media and Facebook and many other examples of companies achieving spectacular success developing new technologies.

So if GitLab turns out to be a winner, it could win out really big.

It is just that there are too many unknowns, the main of which are the future development of the cloud computing market and GitLab's management ability to execute on the company's already well established technological edge.

GitLab and many very young technology startups are similar to young healthcare startups with revolutionary potential. But look at Moderna and Biontech, for example. Moderna and Biontech are proving life changing. 

GitLab might also.


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