Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Bottom-Up

<ul>
<li>GitLab shares have materially underperformed the NASDAQ; GTLB shares down ~28% over the year versus a 14.5% gain on the NASDAQ and a 10.6% loss on the IGV.</li>
<li>Shares saw pressure early in the year because investors reassessed the company’s long-term growth profile in the context of the AI transition in software development.</li>
<li>The stock has since bottomed in the low $20s and gained ~44%. I continue to like GTLB for its superior gross margins, improving FCF and $400M in authorized share buyback.</li>
</ul>


GitLab shares have materially underperformed the NASDAQ; GTLB shares down ~28% over the year versus a 14.5% gain on the NASDAQ and a 10.6% loss on the IGV.
Shares saw pressure early in the year because investors reassessed the company’s long-term growth profile in the context of the AI transition in software development.
The stock has since bottomed in the low $20s and gained ~44%. I continue to like GTLB for its superior gross margins, improving FCF and $400M in authorized share buyback.


2026 High Conviction Update: GitLab Inc., Valuation Is Cheap But No Major Catalysts In Sight

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>GitLab demonstrated solid financial progress in fiscal year 2026, with annual recurring revenue (ARR) surpassing $1 billion and adjusted free cash flow increasing by over 80% to $220 million, alongside nearly seven percentage points of margin expansion year-over-year.</li><li>The company reported its highest net new ARR on both a yearly and quarterly basis, supported by customer growth and retention metrics that remained stable or improved, including a gross retention rate exceeding 90% and the lowest churn in four years.</li><li>Growth in the premium Ultimate product segment contributed significantly, representing 56% of ARR and accounting for nine of the top ten deals in the quarter.</li></ul>

GitLab demonstrated solid financial progress in fiscal year 2026, with annual recurring revenue (ARR) surpassing $1 billion and adjusted free cash flow increasing by over 80% to $220 million, alongside nearly seven percentage points of margin expansion year-over-year.The company reported its highest net new ARR on both a yearly and quarterly basis, supported by customer growth and retention metrics that remained stable or improved, including a gross retention rate exceeding 90% and the lowest churn in four years.Growth in the premium Ultimate product segment contributed significantly, representing 56% of ARR and accounting for nine of the top ten deals in the quarter.

GitLab Is Reinventing Developer Workflows with AI — But Can It Outpace Fierce Competition?

Smartkarma's AI Co-Pilot, Smartkarma

αSK

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Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

<ul>
  <li>GitLab is a comprehensive, single-application DevSecOps platform, positioning it as a key player in the rapidly expanding software development lifecycle market. Its integrated approach is a primary differentiator against competitors who often offer a suite of disparate tools.</li>
  <li>The company is demonstrating a strong growth trajectory with a 3-year revenue CAGR of 44.31% and a clear path toward profitability, marked by improving margins and a recent turn to positive operating and free cash flow. The introduction of AI-powered features like GitLab Duo is a key catalyst for future growth and increased revenue per user.</li>
  <li>Despite its strong market position and growth, GitLab faces significant risks, including intense competition from larger, well-capitalized companies like Microsoft (GitHub) and Atlassian, high uncertainty around sustained differentiation, and concerns over recent executive turnover.</li>
</ul><p><em>This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.</em></p>


  GitLab is a comprehensive, single-application DevSecOps platform, positioning it as a key player in the rapidly expanding software development lifecycle market. Its integrated approach is a primary differentiator against competitors who often offer a suite of disparate tools.
  The company is demonstrating a strong growth trajectory with a 3-year revenue CAGR of 44.31% and a clear path toward profitability, marked by improving margins and a recent turn to positive operating and free cash flow. The introduction of AI-powered features like GitLab Duo is a key catalyst for future growth and increased revenue per user.
  Despite its strong market position and growth, GitLab faces significant risks, including intense competition from larger, well-capitalized companies like Microsoft (GitHub) and Atlassian, high uncertainty around sustained differentiation, and concerns over recent executive turnover.
This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

<ul><li>GitLab recently reported its third-quarter fiscal year 2026 results, revealing a mixed performance.</li><li>The company achieved a notable 25% year-over-year revenue growth to $244 million, which exceeded its guidance by 2 points.</li><li>This growth highlights GitLab's resilient market position, especially in the DevSecOps domain, underscored by a substantial portion of its revenue being driven by its Ultimate tier, accounting for 54% of total annual recurring revenue (ARR).</li></ul>

GitLab recently reported its third-quarter fiscal year 2026 results, revealing a mixed performance.The company achieved a notable 25% year-over-year revenue growth to $244 million, which exceeded its guidance by 2 points.This growth highlights GitLab's resilient market position, especially in the DevSecOps domain, underscored by a substantial portion of its revenue being driven by its Ultimate tier, accounting for 54% of total annual recurring revenue (ARR).

GitLab Is Scaling Its Platform, Pricing, & Sales—A High-Conviction Growth Setup!

<ul>
<li>GitLab Inc. is a complete DevSecOps platform delivered as a single application that empowers organizations to maximize the overall return on software development.</li>
<li>In October 2021, one the largest all-remote companies in the world completed an initial public offering at $77/share, raising $801M at ~$11B valuation.</li>
<li>The stock peaked at $137 in 2021 and fell ~71% over the next 4 years. The underperformance was driven by investor concerns around slowing revenue growth, competition and AI monetization.</li>
</ul>


GitLab Inc. is a complete DevSecOps platform delivered as a single application that empowers organizations to maximize the overall return on software development.
In October 2021, one the largest all-remote companies in the world completed an initial public offering at $77/share, raising $801M at ~$11B valuation.
The stock peaked at $137 in 2021 and fell ~71% over the next 4 years. The underperformance was driven by investor concerns around slowing revenue growth, competition and AI monetization.


2026 High Conviction: GitLab Inc., Undervalued With Duo Agent Platform Growth Upside/M&A Optionality

United States

GitLab Inc. designs and develops software solutions. The Company offers platform for authentication, authorization, devops score, audit, and value stream management. GitLab serves customers worldwide.

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Gitlab (GTLB US)

2026 High Conviction Update: GitLab Inc., Valuation Is Cheap But No Major Catalysts In Sight

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GitLab Is Reinventing Developer Workflows with AI — But Can It Outpace Fierce Competition?

GitLab demonstrated solid financial progress in fiscal year 2026, with annual recurring revenue (ARR) surpassing $1 billion and adjusted free cash...

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Primer: Gitlab (GTLB US) - Dec 2025

GitLab is a comprehensive, single-application DevSecOps platform, positioning it as a key player in the rapidly expanding software development...

αSK

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GitLab recently reported its third-quarter fiscal year 2026 results, revealing a mixed performance. The company achieved a notable 25%...

Baptista Research

2026 High Conviction: GitLab Inc., Undervalued With Duo Agent Platform Growth Upside/M&A Optionality

GitLab Inc., the leading DevSecOps platform provider that delivers software faster and efficiently, is my 2026 high conviction idea in the U.S....

Andrei Zakharov

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