Is Beaten-Down GitLab Stock a Buy as Revenue Growth Remains Strong?

The maker of software development applications turned in solid revenue growth.

GitLab is slimming down its workforce as it makes organizational changes.

But business prospects remain strong, and the stock looks cheap at current levels.

Although its shares have bounced from their lows, GitLab (NASDAQ: GTLB) stock failed to keep its momentum when the company reported its fiscal first-quarter results after the bell on June 2. The DevSecOps (development, security, and operations) company has been caught in the narrative that it will be an AI loser, despite continuing to deliver strong revenue growth. The stock has lost about a third of its value over the past year.

Let's take a closer look at its results and prospects to determine if the growth stock is a buy, or if it's time for investors to give up on the name.

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GitLab saw solid growth in fiscal Q1, coming from both new and existing customers. It realized a 30% increase in new logo growth -- i.e., acquiring new customers -- in the quarter, while its dollar-based net retention was 117% over the past 12 months, showing strong growth within its customer base. The company said it was seeing rising demand from non-technical users, while it also recorded nearly $20 million in consumption revenue from its Duo Agentic Platform.

Overall revenue climbed 23% year over year to $264.2 million. That was well above the company's guidance for revenue of $253 million to $255 million. Subscription revenue increased by 23% year over year to $239.3 million, while license revenue jumped by 25% to $24.9 million.