GitLab shares plunged more than 15% on Thursday following a downgrade to Neutral at J.P. Morgan and warnings from software growth stocks Okta and MongoDB. High interest rates are bad news for growth stocks and, coupled with the warnings, spelled worse news for GitLab.
Of 12 brokerages covering the company, 11 have a Buy or Strong Buy rating, with a Hold rating from the other. At a share price of around $50.50, the upside potential based on a median price target of $70.00 is about 39.4%. At the high price target of $95.00, the upside potential is about 88%.
Second-quarter revenue is forecast at $94.44 million, up 8% sequentially. Analysts have a consensus estimate for an adjusted per-share loss of $0.23, flat with the prior quarter’s loss. For the full 2023 fiscal year ending in January, GitLab is expected to post an adjusted loss of $0.89 per share compared to last year’s loss per share of $1.20. Revenue is forecast to rise 58.6% to $400.8 million.
GitLab is not expected to post a profit in 2023, 2024 or 2025. The company’s enterprise value to sales multiple for 2023 is 16.4. For 2024, the multiple is 11.6, and for 2025 it is 7.9. The stock’s 52-week range is $50.54 to $270.79. The company does not pay a dividend. GitLab’s one-year anniversary as a publicly traded company comes next month.
UiPath
UiPath Inc. (NYSE: PATH) makes and sells a business process automation platform. Over the past 12 months, shares have plunged by 74% on a steady downward trajectory that had slowed since touching a new low in mid-May. The stock’s 52-week high rolls off next week. UiPath’s market opportunity is enormous, but promises are selling well these days.
Of 22 analysts covering the stock, 15 have a Buy or Strong Buy rating on the shares, and six more have Hold ratings. At a share price of around $16.20, the upside potential based on a median price target of $25.00 is 54.3%. At the high price target of $45.00, the upside potential stretches to nearly 178%.
UiPath is expected to report second-quarter fiscal 2023 revenue of $230.68 million, down 5.9% sequentially and 18.0% higher year over year. Analysts are forecasting an adjusted loss per share of $0.06, compared to a prior quarter loss of $0.03 per share and year-ago EPS of $0.012. For the full year, current estimates call for a per-share loss of $0.02, down from year-ago EPS of $0.08, and sales of $1.09 billion, up 22.1%.
The stock trades at 195.9 times estimated 2024 earnings of $0.08 and 121.1 times estimated 2025 earnings of $0.13 per share The stock’s 52-week range is $13.66 to $65.00. UiPath does not pay a dividend and the total shareholder return for the past year is negative 74%.
Originally posted at 24/7 Wall St.
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