Re:Gitlab from YC to IPO
by user5994461 on Thursday October 14, 2021 @03:30PM
(#28868869)
How much of that revenue growth was driven by Gitlab more than quadrupling their price in the last two years? ($4 to $19 a month).
They can't pull that trick again.
Their S-1 says GitLab generated revenues of $152 million in FY 2021 (ending Jan 31), up 87% from the year before². For the sake of argument, let's assume their growth rate slows down "slightly" to 50%. That's ~$230 million projected for FY 2022
At $10 billion, that implies a forward revenue multiple of ~43.5x, which does seem high—but it's not necessarily "unjustified". I haven't read the S-1 and the market reaction to the IPO has been quite positive so far. You'd need to know the business and the market well to make your own individual assessment of why it commands this premium multiple. Customers, TAM, growth, churn, competition, etc.
––––––––––
1. For better or worse, relative valuation is viewed as "more defensible". If you're wrong, you can simply say, "well, that's how the market was pricing it at the time" whereas if you are wrong with your intrinsic valuation model (like a DCF), you have no one to blame.
2. https://www.bamsec.com/filing/162828021018818/1?cik=1653482&...