TipRanks Smart Growth Newsletter #4: DevOps To The Moon
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Dear Investors,
Welcome to the fourth edition of our brand new TipRanks Smart Growth Newsletter.
Through the Smart Growth Newsletter, we aim to provide you with high-potential investment insights to support your growth strategy. Each week, our analysts will identify cutting-edge companies positioned to capture market share and deliver exceptional growth, giving you unique insights in a dynamic investing landscape.
Stocks we recommend have been carefully analyzed and vetted, using TipRanks data, ensuring you receive well-researched, high-potential opportunities aimed at delivering substantial, long-term growth. We will present you with a comprehensive analysis that outlines our selection process, giving you clear insights into why each stock stands out as a top growth opportunity.
With that in mind, let’s dive into this week’s top pick and explore why it could be a valuable addition to your Growth portfolio.
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This Week’s Top Growth Pick: Gitlab (GTLB)
GitLab Inc. is a DevSecOps platform company that provides a comprehensive, single-application solution for the entire software development lifecycle. GitLab’s platform integrates development, security, and operations, enabling teams to collaborate efficiently while automating workflows, ensuring code security, and accelerating delivery.
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Here’s Why GTLB’s Stock Is Likely to Grow:
❖ Strong Revenue Growth: GitLab has delivered exceptional performance, achieving a 48% CAGR in revenue over the past three years and consistently beating analyst expectations.
❖ Clear Path to Profitability: Significant improvements in operating margins and a surge in operating income highlight GitLab’s operational efficiency and scalability.
❖ Robust Financial Position: With no long-term debt and $917 million in cash and equivalents, GitLab maintains financial strength and flexibility to drive growth and innovation.
❖ Unique Market Position: As the only comprehensive, all-in-one DevSecOps platform, GitLab simplifies workflows and drives adoption, setting it apart from competitors.
❖ Innovation in AI: GitLab’s AI-powered tools, particularly GitLab Duo, enhance automation and security, fueling enterprise adoption and customer expansion.
❖ Analyst Optimism: Wall Street analysts rate GTLB a “Strong Buy,” projecting notable upside for the stock, backed by consistent execution and favorable market trends.
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Open-Sourcing Growth
GitLab Inc. was founded in 2011 by Dmitriy Zaporozhets and Valery Sizov as an open-source project to enable collaborative software development. The company officially incorporated in 2014, with co-founder Sid Sijbrandij playing a key role in scaling the business. Initially focused on source code management, GitLab evolved into a comprehensive DevSecOps (Development, Security, and Operations) platform, integrating development, security, and operations into a single application.
The company’s open-core model (offering free and premium paid tiers) drove user adoption, attracting individual developers, startups, and large enterprises. GitLab gained traction as it addressed fragmented DevOps toolchains with its end-to-end solution, simplifying workflows and improving efficiency.
GitLab’s growth accelerated through several significant funding rounds. Between 2015 and 2019, the company raised over $400 million from investors including Goldman Sachs, Google Ventures, and ICONIQ Capital, reaching a $2.75 billion valuation by late 2019. This capital fueled product innovation, global expansion, and enterprise sales.
In 2021, GitLab went public on the Nasdaq under the ticker GTLB, raising approximately $801 million in its IPO. The offering highlighted its strong revenue growth and competitive position against GitHub and Atlassian. Thanks to strong growth rates, the company’s market cap grew more than tenfold since its IPO, reaching $9.88 billion.
Key factors contributing to GitLab’s growth include the increasing adoption of DevSecOps, expansion of the Ultimate tier, targeting large enterprises with premium features, and strategic partnerships and integrations with cloud providers like AWS and Google Cloud. GitLab has also invested in AI-powered DevOps tools to enhance automation and efficiency, positioning itself to capture further market share. While GitLab has not yet reached profitability, its focus on enterprise customers and continuous margin expansion remains central to its path forward.
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Cross-Functional Strength
GitLab operates in a competitive market as one of the smaller players, forcing it to contend with giants like Microsoft and Atlassian. However, GitLab is well-positioned to gain market share through its unique strengths:
- Single-Application DevSecOps Platform: GitLab offers an all-in-one solution, eliminating the need for multiple tools and integrations. This simplifies workflows, saves time, and enhances efficiency, appealing to organizations seeking integrated development and deployment cycles.
- Open-Core Model: The open-source version attracts developers with its transparency and flexibility, while paid tiers deliver enterprise-grade features like security, compliance, and scalability. This approach fosters adoption through free offerings and enables conversion as organizations scale.
- Enterprise-Ready and Remote-First: GitLab’s self-hosted, enterprise-ready platform resonates with companies prioritizing compliance and modern collaboration practices. In contrast, GitHub and Bitbucket are perceived as more cloud-focused.
Source: GitLab Investor Presentation
The DevOps tools market is growing rapidly, driven by digital transformation, rising adoption of CI/CD (continuous integration and continuous deployment) and DevSecOps, and increasing automation demands. While GitHub dominates the market and Atlassian’s ecosystem is entrenched in many organizations, GitLab can carve out a strong niche among enterprises seeking an end-to-end integrated solution.
Moreover, GTLB’s competitors have significant gaps, helping the company strengthen its position. Thus, Atlassian’s Bitbucket is popular with Jira users but outdated, with less comprehensive CI/CD features. JFrog is strong in artifact management but lacks GitLab’s full-suite platform. Microsoft’s GitHub is widely adopted but lacks GitLab’s out-of-the-box DevSecOps capabilities and has less mature CI/CD tools.
Though overtaking incumbents is challenging, GitLab’s “land and expand” strategy – acquiring customers first and growing profitability later – positions it well to capture market share in this large, competitive, and expanding market.
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Hundred Years of Runway
Unlike many growth companies, GitLab boasts a rock-solid balance sheet with no long-term debt and strong cash reserves. Historically funded through equity financing (venture capital, private investments, and its 2021 IPO) as well as growing revenue from its subscription-based business model, GitLab’s debt-free position reduces interest expenses, lowers financial risk, and provides flexibility to invest in growth.
As of fiscal Q3 2025 (reported December 5th, 2024), GitLab delivered an adjusted FCF of $9.7 million (excluding a $187.7 million one-time tax payment) and held $917 million in cash and equivalents. Positive adjusted FCF, even after a major outlay, signals that GitLab’s core operations generate healthy cash flow, ensuring a very long cash runway.
Revenue growth remains impressive, with a 48% CAGR over the past three years, well above U.S. software industry averages. In fiscal 2024, revenue rose 37% YoY, and in FQ3 2025, revenue increased 31% YoY, beating analyst expectations. This growth reflects strong momentum in customer acquisition and platform adoption.
Beyond top-line growth, GTLB achieved significant milestones with large enterprise customers (>$100K ARR), up 31% YoY, and a Net Retention Rate of 124%, indicating expanding usage by existing clients.
Operational efficiency also made notable improvements. GitLab’s non-GAAP operating margin reached 13%, up from 3% a year ago, while operating income surged to $25.9 million from $4.7 million, marking clear progress toward consistent profitability.
GitLab’s continued investment in innovation fuels its growth. Spending 32% of revenue on R&D has paid off in customer acquisition and upsells. Its AI-powered DevSecOps platform, particularly GitLab Duo, integrates AI natively, simplifying adoption and differentiating GitLab from competitors like GitHub and Bitbucket, which often require separate tools or add-ons.
GitLab remains in the high-growth phase of its lifecycle, prioritizing expansion over short-term profits. However, it has established a clear path to sustained profitability, driven by its ability to balance robust revenue growth with improving operational efficiency. As revenue scales and enterprise adoption of GitLab’s premium offerings expand, operating leverage is expected to strengthen as well.
The company’s non-GAAP EPS has grown in the high double or triple digits year-over-year in several recent quarters, and analysts project this strong growth to continue. For the next fiscal year, GitLab is expected to achieve a ~38% increase in EPS, with a similar growth rate anticipated during the following year.
Source: GitLab Investor Presentation
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Fast Growth at a Fair Price
GitLab’s stock is almost flat in the past year, having been affected by investors’ preference for large, profitable, and established companies up until a couple of month ago, when the macroeconomic backdrop began to brighten for smaller, more risky firms.
Although the stock has been gaining traction recently, rising considerably from its recent low in August, its current multiples still look attractive compared to its own history. Besides, while trading at higher valuations than the Software sector’s averages, GTLB comes in the middle of the valuation scale for comparable peers, including P/S ratio and EV/Revenue multiple. Moreover, when looking at its future cash flows, GitLab appears undervalued by about 35%.
TipRanks top-rated Wall Street analysts expect the company’s stock to continue on its recent upward trajectory, rating the stock a “Strong Buy” and projecting an average upside of about 30% in the next 12 months. Notably, about a dozen leading Wall Street brokerages lifted their price targets significantly following the company’s stellar FQ3 report. Given the company’s track record of consistently beating analyst estimates, analyst upgrades may continue further.
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To Sum It All Up
GitLab Inc. is a leading DevSecOps platform company providing a comprehensive, single-application solution for the software development lifecycle. Its platform seamlessly integrates development, security, and operations, enabling streamlined collaboration, automation, and enhanced security. Since its 2021 IPO, GitLab has achieved exceptional revenue and customer growth while maintaining a solid financial position with no long-term debt and strong cash reserves. Consistent improvement in operational metrics highlights its clear path to profitability. Positioned in the rapidly growing DevOps market, GitLab’s all-in-one solution drives further expansion against competitors. Analysts rate the stock a “Strong Buy,” projecting significant upside, making GitLab a compelling choice for long-term growth investors.
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Click here for more stock analysis from TipRanks Macro & Markets research analyst Yulia Vaiman
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