Press Release: Gitlab To Announce Third Quarter Fiscal 2025 Financial Results

Ubiquiti Inc. (UI) came out with quarterly earnings of $2.14 per share, beating the Zacks Consensus Estimate of $1.77 per share. This compares to earnings of $1.47 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 20.90%. A quarter ago, it was expected that this computer networking company would post earnings of $1.67 per share when it actually produced earnings of $1.74, delivering a surprise of 4.19%.

Over the last four quarters, the company has surpassed consensus EPS estimates two times.

Ubiquiti, which belongs to the Zacks Wireless Equipment industry, posted revenues of $550.34 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.86%. This compares to year-ago revenues of $463.08 million. The company has topped consensus revenue estimates just once over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Ubiquiti shares have added about 87.2% since the beginning of the year versus the S&P 500's gain of 25.2%.

What's Next for Ubiquiti?

While Ubiquiti has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Ubiquiti: favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $1.75 on $509.34 million in revenues for the coming quarter and $7.17 on $2.16 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Wireless Equipment is currently in the top 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One other stock from the broader Zacks Computer and Technology sector, GitLab Inc. (GTLB), is yet to report results for the quarter ended October 2024.

This company is expected to post quarterly earnings of $0.16 per share in its upcoming report, which represents a year-over-year change of +77.8%. The consensus EPS estimate for the quarter has been revised 15.8% lower over the last 30 days to the current level.

GitLab Inc.'s revenues are expected to be $187.67 million, up 25.4% from the year-ago quarter.

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SEMrush Holdings, Inc. (SEMR) came out with quarterly earnings of $0.06 per share, missing the Zacks Consensus Estimate of $0.07 per share. This compares to earnings of $0.06 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of -14.29%. A quarter ago, it was expected that this company would post earnings of $0.07 per share when it actually produced earnings of $0.06, delivering a surprise of -14.29%.

Over the last four quarters, the company has surpassed consensus EPS estimates just once.

SEMrush, which belongs to the Zacks Internet - Software industry, posted revenues of $97.41 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 0.95%. This compares to year-ago revenues of $78.72 million. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

SEMrush shares have added about 1% since the beginning of the year versus the S&P 500's gain of 24.3%.

What's Next for SEMrush?

While SEMrush has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for SEMrush: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.07 on $100.93 million in revenues for the coming quarter and $0.25 on $374.19 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 25% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

GitLab Inc. (GTLB), another stock in the same industry, has yet to report results for the quarter ended October 2024.

This company is expected to post quarterly earnings of $0.16 per share in its upcoming report, which represents a year-over-year change of +77.8%. The consensus EPS estimate for the quarter has been revised 15.8% lower over the last 30 days to the current level.

GitLab Inc.'s revenues are expected to be $187.67 million, up 25.4% from the year-ago quarter.

Zacks Investment Research

Investors in GitLab Inc. GTLB need to pay close attention to the stock based on moves in the options market lately. That is because the Jan. 17, 2024 $22.50 Call had some of the highest implied volatility of all equity options today.

What is Implied Volatility?

Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.

What do the Analysts Think?

Clearly, options traders are pricing in a big move for GitLab shares, but what is the fundamental picture for the company? Currently, GitLab is a Zacks Rank #3 (Hold) in the Internet – Software industry that ranks in the Top 24% of our Zacks Industry Rank. Over the last 60 days, no analyst increased the earnings estimates for the current quarter, and none dropped the estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from 36 cents per share to 46 cents in that period.

Given the way analysts feel about GitLab right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.

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