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Investing.com - BofA Securities has reiterated its Buy rating and $72.00 price target on GitLab Inc (NASDAQ:GTLB), currently trading at $46.88 with a market capitalization of $7.74 billion, following investor meetings with the company’s leadership.
The investment firm expressed increased confidence in GitLab’s long-term market share potential within the DevSecOps category after discussions with CEO Bill Staples and CFO Brian Robins. According to InvestingPro, 14 analysts have recently revised their earnings expectations upward, supporting this optimistic outlook.
BofA Securities highlighted GitLab’s "Duo strategy" as appropriately positioned to drive higher adoption of premium paid tiers and add-on AI products including Duo Pro, Duo Enterprise, and the Agent Platform.
The firm addressed bearish concerns about code generation competitors potentially causing shrinking seats and technological disadvantages for GitLab, stating it disagrees with these views and believes code generation is "becoming a feature" while GitLab’s end-to-end developer workflow efficiency remains differentiated.
BofA Securities expects GitLab to maintain durable revenue growth exceeding 20% with expanding free cash flow margins over the medium term, which it considers "attractive investment traits." The company’s strong balance sheet, with more cash than debt, and current trading price near InvestingPro’s Fair Value suggest a balanced risk-reward profile.
In other recent news, GitLab Inc. reported a first-quarter revenue growth of 27%, which UBS described as strong within the software sector. Despite this growth, the revenue beat of $1.5 million was noted as the smallest ever by UBS, and the firm lowered its price target to $73 from $85 while maintaining a Buy rating. Macquarie also lowered its price target to $75 from $90, citing a modest revenue beat and unchanged full-year revenue guidance, though it maintained an Outperform rating. Macquarie highlighted GitLab’s 14 percentage point increase in non-GAAP operating margin and its raised full-year operating income and EPS guidance.
Canaccord Genuity adjusted its price target for GitLab to $76 from $78 due to valuation shifts but kept a Buy rating, pointing to strong revenue growth from seat expansions. William Blair reiterated an Outperform rating following GitLab’s virtual launch of GitLab 18, emphasizing mid-20s top-line growth and over 120% net revenue retention. DA Davidson maintained a Neutral rating with a $45 price target, noting the company’s enterprise expansion strategy through its premium offerings. GitLab’s recent developments include the introduction of the GitLab Duo Agent Platform and expanded partnerships with Amazon (NASDAQ:AMZN) and Anthropic, supporting its vision as a comprehensive DevSecOps platform.
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