Analysts are Downgrading These 5 Tech Stocks

3. GitLab Inc. (NASDAQ:GTLB)

Number of Hedge Fund Holders: 36

Shares of GitLab Inc. (NASDAQ:GTLB) plummeted nearly 16 percent on Thursday, September 1, 2022, after JPMorgan slashed its ratings for the software solutions provider from “Overweight” to “Neutral,” citing its higher valuation.

Analyst Pinjalim Bora said the valuation of GitLab Inc. (NASDAQ:GTLB) is the second highest in the software space. Bora, who has a price target of $63 per share for GitLab Inc. (NASDAQ:GTLB), thinks the stock’s risk/reward is fairly balanced at the moment.

Earlier this year, asset management firm Baron Funds, discussed GitLab Inc. (NASDAQ:GTLB) in its first-quarter 2022 investor letter, stating:

“While not highlighted in our top purchases, this quarter we also initiated a position in GitLab Inc. (NASDAQ:GTLB) GitLab provides a software development and IT operations (DevOps) platform that developers, product managers, IT operations teams, and security professionals use to collaborate throughout the software development lifecycle. For developers, the GitLab platform addresses the planning, creation, verification, testing, and deployment of code. Once code is shipped into production, IT operations professionals can use GitLab to continuously protect and monitor code and identify any issues or bugs for further updates. The GitLab platform helps more than 15,000 customers reduce time to market for new applications, automate continuous feature updates, reduce security vulnerabilities, and retain developer talent. GitLab is the only end-to-end DevOps platform that addresses all stages of the software lifecycle using a single codebase and unified data model, giving it a competitive advantage over point solutions. GitLab employs an open-source model, which has led to viral adoption among 30 million developers. More than 2,600 of these developers are active contributors to GitLab’s product, enabling the company to release upgrades much faster than competitors. These consistent product enhancements have led to low churn and strong expansion in GitLab’s existing customer base, driving a best-in-class 150%-plus dollar-based net retention rate (a measure of current customer average growth, where a value over 100% equals positive growth).”