GitLab stock price target lowered to $57 by BTIG on sales restructuring

Investing.com - BTIG has reduced its price target for GitLab Inc (NASDAQ:GTLB) to $57 from $67 while maintaining a Buy rating, citing concerns about the company’s revenue outlook despite strong quarterly results. According to InvestingPro data, GitLab’s current market capitalization stands at $7.75 billion, with the stock trading near its Fair Value levels.

GitLab reported second-quarter revenue of $236 million, representing 29.2% year-over-year growth and exceeding both BTIG’s and Wall Street’s expectations of approximately $226.9 million. The company also delivered better-than-anticipated operating income and free cash flow during the quarter. InvestingPro data reveals impressive gross profit margins of 88.64%, highlighting the company’s operational efficiency.

Despite the strong performance, GitLab maintained its full-year revenue guidance at a midpoint of $939 million, effectively reducing its second-half outlook by $9.5 million or 1.9%. BTIG noted this conservative guidance stems from changes to GitLab’s go-to-market structure aimed at improving new customer acquisition and increasing product adoption among existing clients. The company maintains strong financial health metrics, with InvestingPro analysis showing more cash than debt on its balance sheet and liquid assets exceeding short-term obligations.

BTIG highlighted that GitLab’s current revenue projection implies growth deceleration from 29% in the second quarter to 18% by the fourth quarter of fiscal 2026, which the firm considers conservative. The analyst also pointed to strong underlying metrics, including Current Remaining Performance Obligations growing 31% year-over-year.

The unexpected departure of GitLab’s CFO Brian Robins, who is joining Snowflake, was identified as an additional factor weighing on the stock’s performance after market close.

In other recent news, GitLab Inc. reported its second-quarter earnings for fiscal year 2026, exceeding analysts’ expectations with an earnings per share (EPS) of $0.24, a 50% surprise over the forecast of $0.16. The company also reported revenue of $236 million, surpassing the projected $226.9 million. Despite these strong results, Goldman Sachs lowered its price target for GitLab to $48.00, citing growth concerns, while maintaining a Neutral rating. Wolfe Research also adjusted its price target to $52.00 but kept an Outperform rating, noting GitLab’s valuation relative to peers. RBC Capital reiterated its Outperform rating with a $58.00 price target, highlighting GitLab’s solid results and fiscal year 2026 revenue guidance. BofA Securities maintained its Buy rating with a $72.00 price target, commending GitLab’s strong quarterly performance and subscription revenue growth. These recent developments reflect varying analyst perspectives on GitLab’s future growth and market positioning.

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