On Tuesday, GitLab Inc. (NASDAQ:GTLB) shares plummeted by more than 11% after reporting its most recent quarterly results. The company announced its fiscal third-quarter revenue and earnings Monday after markets closed, beating the consensus for analyst expectations.
GitLab posted FQ3 non-GAAP earnings per share of -$0.34, outperforming the average analyst estimate of -$0.48. On the other hand, its GAAP EPS of -$0.62 missed the expectation of -$0.54, while revenue for the quarter increased by 58.5% from the same quarter a year ago to $66.8 million, surpassing consensus Street expectations by $7.63 million.
Is it safe to buy GitLab shares?
From an investment perspective, GitLab shares trade at a steep price-sales ratio of 60.12, making the stock too expensive for bargain hunters.
In addition, analysts are less excited about its growth potential, forecasting an EPS decline of 47%. Therefore, growth investors could also opt for alternatives in the market.
The stock has plunged nearly 39% since its post-listing spike propelled it to an all-time high of $137 per share.
Source – TradingView
Technically, GitLab shares seem to be trading within a descending channel formation in the intraday chart. As a result, the stock has plummeted to trade closer to the oversold conditions of the 14-day RSI.
Therefore, investors could target short-term technical rebound profits at about $88.39, or higher at $98.45, while $70.83 and $60.57 are crucial support zones.
In summary, GitLab shares seem to have recently plummeted to create an exciting opportunity for technical buyers.
The post Is it too risky to buy GitLab stock as shares fall despite a solid FQ3 beat? appeared first on Invezz.
