Gitlab Inc (NASDAQ:GTLB) stock is down 1.1% to trade at $38.19 at last glance, after suffering a downgrade from KeyBanc to "sector weight" from "overweight." The analyst in question cited the software giant's pricing power, as well as changes to its business model that increase execution risk in the short term.
The brokerage bunch leaned optimistic toward GTLB coming into today, with 20 of the 29 firms in coverage sporting a "buy" or better, while the 12-month consensus target price of $53.73 is a 40.1% premium to current levels. This means there's plenty of room for additional bear notes.
Short sellers have been building their positions, though, with short interest up 2.4% in the last reporting period. The 12.35 million shares sold short now make up 8.5% of the stock's available float, or nearly three days' worth of pent-up buying power.
GTLB carries a 32% year-to-date deficit, and is now on track for a third-straight daily loss. Shares are headed back toward their Dec. 3, two-year low of $35.81, and have struggled with overhead pressure at the descending 20-day moving average since early November.
Nevertheless, options traders lean bullish. GTLB sports a 10-day call/put volume ratio of 7.06 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that sits higher than 80% of annual readings. An unwinding of this optimism could create additional tailwinds for the shares.
