This post was originally published on this site
https://i-invdn-com.investing.com/news/LYNXNPEB6J0AJ_M.jpg
In a note on GitLab Inc. (NASDAQ:GTLB), MoffettNathanson analysts told investors that the market “got it wrong Friday.”
GitLab shares fell over 11% during Friday’s session, while they are currently down a further 5.75% on Monday.
“It was a brutal market on Friday for software and, in our coverage, just under one quarter of the stocks declined ~10% or more as compared to a 1.36% increase for the S&P 500. The big reason was the reaction to earnings from Atlassian (TEAM, Not Rated) and Twilio (TWLO, Not Rated), but we believe the market got it wrong with GitLab and the interpretation of the Atlassian results,” wrote the analysts, who have an Outperform rating and $101 per share price target on GitLab shares.
They explained that they believe GitLab’s growth is more leveraged to displacing legacy solutions with an attractive cost-benefit offering and not relying on hiring to grow.
“We think the drivers for expansion in existing customers are likely to hold up much better than what Atlassian reported. If we are right, we could see another strong quarter out of GitLab and subsequent push higher in the stock,” the analysts added.
