Investment Thesis
GitLab (GTLB) is a stock that I downgraded GitLab from a BUY to a HOLD, since I was disenchanted with the company's progress on its underlying profitability.
However, it turns out that my thesis was right, simply that my timing was off by a quarter. Remember, that time is money. If you are right, but too early, it's the same as being wrong.
More concretely, I now see a path for GitLab to next year deliver around $130 to $150 million of non-GAAP operating profits.
However, given that it will take a lot of effort to get investors to fall back in love with GitLab's prospects, together with the fact that GTLB is now growing at less than 30% CAGR, I've lowered my price target to $75 per share by summer 2025.
The one-sentence takeaway is this, I'm going to buy a more GTLB, and as such, I'll increase my position to 5% of the DVR portfolio. I'm very excited to own GTLB and you should seriously consider it too!
Keep reading with a 7-day free trial
Subscribe to Deep Value Returns to keep reading this post and get 7 days of free access to the full post archives.