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Investing.com - GitLab Inc (NASDAQ:GTLB) shares fell after the company announced Chief Financial Officer Brian Robins is leaving to join Snowflake, despite reporting better-than-expected second-quarter results. The company maintains strong financial health with a current ratio of 2.48 and zero debt on its balance sheet.
The software development platform posted 29% revenue growth in the second quarter, exceeding analyst expectations with approximately 4% upside compared to the 1% beat in the previous quarter. According to InvestingPro data, the company maintains impressive gross profit margins of 88.6%, among the highest in its peer group.
GitLab maintained its fiscal year 2026 guidance but issued a more conservative second-half outlook, projecting growth of approximately 20% versus the previous 22% estimate, citing both the CFO transition and some softness in the small and medium business segment.
TD Cowen reiterated its Buy rating and $62.00 price target on GitLab stock, noting that management reported accelerating paid seat growth and identifying artificial intelligence as a positive catalyst for the company.
The firm expressed optimism about the new Chief Revenue Officer addressing persistent new customer acquisition challenges, while highlighting GitLab’s attractive valuation at approximately 5.5x EV/CY26E Sales and 25x FCF with mid-20% growth expectations and over 20% free cash flow margins.
In other recent news, GitLab Inc reported its second-quarter fiscal 2026 results, showcasing a notable 29% year-over-year revenue growth to $236.0 million. This performance exceeded Wall Street’s expectations and was primarily driven by a 30% increase in subscription revenue, which now makes up 90% of the company’s total revenue. Despite these strong results, GitLab maintained its previous top-line guidance, prompting various analysts to adjust their price targets. Truist Securities lowered its price target to $55, citing a cautious outlook for the second half of the year. Piper Sandler also reduced its price target to $70, following leadership changes, while acknowledging the company’s strongest revenue beat in two years. Mizuho adjusted its price target to $52, highlighting conservative guidance despite the impressive revenue growth. Rosenblatt Securities maintained its Buy rating with a $58 price target, noting the company’s subscription revenue as a key driver. Canaccord Genuity also lowered its price target to $70, emphasizing GitLab’s continued revenue growth from seat expansions.
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