GitLab (NASDAQ:GTLB investor one-year losses grow to 54% as the stock sheds US$1.4b this past week

Taking the occasional loss comes part and parcel with investing on the stock market. Anyone who held GitLab Inc. (NASDAQ:GTLB) over the last year knows what a loser feels like. The share price is down a hefty 54% in that time. GitLab may have better days ahead, of course; we've only looked at a one year period. More recently, the share price has dropped a further 18% in a month. But this could be related to poor market conditions -- stocks are down 7.4% in the same time.

Since GitLab has shed US$1.4b from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

Check out our latest analysis for GitLab

Given that GitLab didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last year GitLab saw its revenue grow by 70%. That's a strong result which is better than most other loss making companies. Meanwhile, the share price slid 54%. This could mean hype has come out of the stock because the bottom line is concerning investors. We'd definitely consider it a positive if the company is trending towards profitability. If you can see that happening, then perhaps consider adding this stock to your watchlist.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth
earnings-and-revenue-growth

GitLab is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for GitLab in this interactive graph of future profit estimates.

A Different Perspective

GitLab shareholders are down 54% for the year, even worse than the market loss of 22%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. The share price decline has continued throughout the most recent three months, down 16%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 3 warning signs we've spotted with GitLab (including 1 which is a bit unpleasant) .

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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