Comparing GitLab (NASDAQ:GTLB) and Spotify Technology (NYSE:SPOT)

Spotify Technology (NYSE:SPOT) and GitLab (NASDAQ:GTLB) are both computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, risk, valuation, earnings, analyst recommendations, profitability and dividends.

Risk and Volatility

Spotify Technology has a beta of 1.67, suggesting that its share price is 67% more volatile than the S&P 500. Comparatively, GitLab has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500.

Earnings & Valuation

This table compares Spotify Technology and GitLab”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spotify Technology	$16.96 billion	7.08	$1.23 billion	$6.36	91.74
GitLab	$759.25 million	9.11	-$6.33 million	($0.04)	-1,037.25

Spotify Technology has higher revenue and earnings than GitLab. GitLab is trading at a lower price-to-earnings ratio than Spotify Technology, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and target prices for Spotify Technology and GitLab, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spotify Technology	0	8	22	2	2.81
GitLab	1	8	16	2	2.70

Spotify Technology currently has a consensus price target of $758.86, indicating a potential upside of 30.06%. GitLab has a consensus price target of $57.87, indicating a potential upside of 39.48%. Given GitLab’s higher probable upside, analysts clearly believe GitLab is more favorable than Spotify Technology.

Institutional & Insider Ownership

84.1% of Spotify Technology shares are owned by institutional investors. Comparatively, 95.0% of GitLab shares are owned by institutional investors. 0.4% of Spotify Technology shares are owned by company insiders. Comparatively, 21.4% of GitLab shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Spotify Technology and GitLab’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Spotify Technology	8.46%	21.68%	10.76%
GitLab	-0.55%	-2.71%	-1.63%

Summary

Spotify Technology beats GitLab on 10 of the 14 factors compared between the two stocks.

About Spotify Technology

Spotify Technology S.A., together with its subsidiaries, provides audio streaming subscription services worldwide. It operates through two segments, Premium and Ad-Supported. The Premium segment offers unlimited online and offline streaming access to its catalog of music and podcasts without commercial breaks to its subscribers. This segment sells directly to the end users. The Ad-Supported segment provides on-demand online access to its catalog of music and unlimited online access to the catalog of podcasts to its users on their computers, tablets, and compatible mobile devices. The company also offers sales, distribution and marketing, contract research and development, and customer and other support services. Spotify Technology S.A. was incorporated in 2006 and is based in Luxembourg City, Luxembourg.

About GitLab

GitLab Inc., through its subsidiaries, develops software for the software development lifecycle in the United States, Europe, and the Asia Pacific. It offers GitLab, a DevOps platform, which is a single application that leads to faster cycle time and allows visibility throughout and control over various stages of the DevOps lifecycle. The company helps organizations to plan, build, secure, and deploy software to drive business outcomes. It also provides related training and professional services. The company was formerly known as GitLab B.V. and changed its name to GitLab Inc. in July 2015. GitLab Inc. was founded in 2011 and is headquartered in San Francisco, California.