GitLab Is Undervalued On Infrastructure As A Servce Cloud Computing

GitLab Inc, the online code repository cloud software collaboration tool is undervalued on the potential of Infrastructure as a Service Cloud, IaaS computing, according to Wolfteam Ltd.

GitLab Inc, akin to GitHub provides an invaluable tool for programmers to cooperate and work on projects simultaneously and in the cloud from a distance.

With 424.34 mln. USD in revenue, growing at 67.95 % with negative net profit margin of - 40.61 % for the calendar 2022, GitLab Inc's intrinsic value is 47 billion USD according to Wolfteam Ltd.'s future revenue and profitability projections. This compares with GitLab's current market capitalization of 7.54 billion USD. For comparison GitHub was acquired by Microsoft for 7.5 billion USD.

The Infrastructure as a Service, IaaS part of the cloud computing market is forecast to reach 700 billion USD in revenue in 10 years time. Amazon AWS, Microsoft Azure and Google Cloud are the biggest competitors which have turned IaaS into a quasi oligopoly.

Gitlab, however, has carved out an already large, also growing fast niche for itself in the Infrastructure as a Service, IaaS cloud computing market by offering fast execution, stable interface and scalability for software teams collaboration and code storage.

Actually to write the software supporting the APIs, Application Programming Interfaces of Amazon AWS, Microsoft Azure and Google Cloud one needs a service like Gitlab or GitHub to write the code supporting the API. Software programming teams the world over need a git repository, where they can collaborate and store their work and GitLab with its gamified interface fills this void. Together with GitHub. It is remarkable that only two firms, namely GitLab and GitHub hold such a valuable Infrastructure as a Service, IaaS part of the cloud computing market niche as code collaboration and repository.

For the last reported quarter, namely the Second Quarter for the Fiscal Year 2024 ending on July 31st 2023 GitLab reported revenue of 139.6 growing at 38.14 % quarterly year on year when the technology business was slowing in the United States and globally and many leading large, medium or small technology firms reported revenue growing only in the single digits or even falling revenue

Second Quarter Fiscal Year 2024 Financial Highlights (in millions, except per share data and percentages):   Q2 FY 2024   Q2 FY 2023   Y/Y Change Revenue $ 139.6     $ 101.0       38 % GAAP Gross margin   89 %     87 %     Non-GAAP Gross margin   91 %     89 %     GAAP Operating loss $ (54.1 )   $ (65.3 )   $ 11.2   Non-GAAP Operating loss $ (4.3 )   $ (27.0 )   $ 22.7   GAAP Net loss attributable to GitLab $ (50.1 )   $ (59.0 )   $ 8.9   Non-GAAP Net income (loss) attributable to GitLab $ 1.9     $ (21.5 )   $ 23.4   GAAP Net loss per share attributable to GitLab $ (0.33 )   $ (0.40 )   $ 0.07   Non-GAAP Net income (loss) per  share attributable to GitLab $ 0.01     $ (0.15 )   $ 0.16

In addition, GitLab gave very positive guidance numbers for the next quarters: Third Quarter and Fiscal Year 2024 Financial Outlook For the third quarter and fiscal year 2024, GitLab Inc. expects (in millions, except share and per share data): Third Quarter and Fiscal Year 2024 Financial Outlook For the third quarter and fiscal year 2024, GitLab Inc. expects (in millions, except share and per share data):   Q3 FY 2024 Guidance   FY 2024 Guidance Revenue $140.0 - $141.0   $555.0 - $557.0 Non-GAAP operating loss $(6.0) - $(5.0)   $(33.0) - $(30.0) Non-GAAP net loss per share assuming approximately 155 million and 154 million weighted average shares outstanding as of Q3 FY2024 and FY24, respectively $(0.02) - $(0.01)   $(0.08)

For the last reported fiscal year GitLab also reported strong growth of revenue  - 88 % revenue growth for the fiscal year: Fourth Quarter Fiscal Year 2023 Financial Highlights (in millions, except per share data and percentages):   Q4 FY 2023   Q4 FY 2022   Y/Y Change Revenue $ 122.9     $ 77.8       58 % GAAP Gross margin   88 %     88 %     Non-GAAP Gross margin   90 %     89 %     GAAP Operating loss $ (46.3 )   $ (40.6 )   $ (5.7 ) Non-GAAP Operating loss $ (13.8 )   $ (27.4 )   $ 13.6   GAAP Net loss attributable to GitLab $ (38.7 )   $ (45.8 )   $ 7.1   Non-GAAP Net loss attributable to GitLab $ (4.5 )   $ (23.2 )   $ 18.7   GAAP Net loss per share attributable to GitLab $ (0.26 )   $ (0.32 )   $ 0.06   Non-GAAP Net loss per share attributable to GitLab $ (0.03 )   $ (0.16 )   $ 0.13

Fiscal Year 2023 Financial Highlights (in millions, except per share data and percentages):   FY 2023   FY 2022   Y/Y Change Revenue $ 424.3     $ 252.7       68 % GAAP Gross margin   88 %     88 %     Non-GAAP Gross margin   90 %     89 %     GAAP Operating loss $ (211.4 )   $ (129.0 )   $ (82.4 ) Non-GAAP Operating loss $ (87.1 )   $ (98.3 )   $ 11.2   GAAP Net loss attributable to GitLab $ (172.3 )   $ (155.1 )   $ (17.2 ) Non-GAAP Net loss attributable to GitLab $ (67.7 )   $ (95.3 )   $ 27.6   GAAP Net loss per share attributable to GitLab $ (1.16 )   $ (1.95 )   $ 0.79   Non-GAAP Net loss per share attributable to GitLab $ (0.46 )   $ (1.20 )   $ 0.74

GitLab is still unprofitable as are most young, fast growing technology companies. GitLab is heavily investing in growth. If revenue goes on growing so briskly it is a matter of only a couple of years before GitLab turns significant profit which will substantiate its intrinsic value to the 50 billion USD estimate by Wolfteam Ltd.