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Investing.com - Piper Sandler reduced its price target on GitLab Inc (NASDAQ:GTLB) to $70.00 from $85.00 on Thursday, while maintaining an Overweight rating on the DevSecOps platform provider. The company, currently valued at $7.75 billion, is trading at $43.18 and appears slightly undervalued according to InvestingPro Fair Value metrics.
The firm’s decision follows GitLab’s second-quarter results, which showed the company’s strongest revenue beat in two years, improved margins, and momentum in large customer acquisition despite recently announced leadership changes. InvestingPro data reveals impressive gross profit margins of 88.64% and strong revenue growth of 29.31% over the last twelve months. The company maintains a healthy balance sheet with more cash than debt, one of several key insights available in the comprehensive Pro Research Report.
Piper Sandler noted that GitLab plans to reorient its go-to-market strategy to focus on expanding new customer velocity and enterprise customer adoption, though the company’s reiterated full-year revenue guidance caused some concern in after-hours trading.
The research firm expressed continued confidence in GitLab as a "top idea" in its coverage universe, citing the company’s modest valuation of approximately 5.5 times estimated calendar year 2026 revenue despite growth exceeding 20% while maintaining a "rule of 40+" profile.
GitLab’s second-quarter performance marks a significant improvement from its first quarter, which Piper Sandler characterized as the company’s smallest revenue beat since its initial public offering.
In other recent news, GitLab Inc reported a 29% year-over-year revenue growth for the second quarter, surpassing Wall Street’s expectations of around 24%. The company achieved $236.0 million in revenue, driven largely by a 30% increase in subscription revenue, which accounted for 90% of total revenue. Despite this strong performance, GitLab maintained its fiscal year 2026 outlook, citing some softness in the small and medium-sized business market and ongoing changes in its go-to-market strategy. Analyst firms responded to these developments with varying adjustments to their price targets for GitLab.
Mizuho lowered its price target to $52, while maintaining an Outperform rating, noting conservative guidance from the company. Rosenblatt Securities kept its Buy rating with a $58 price target, acknowledging the revenue growth exceeding their estimates. Canaccord Genuity adjusted its price target to $70, highlighting the continued revenue growth from seat expansions. Needham reiterated its Buy rating with a $55 price target, focusing on the company’s strategic changes. Lastly, UBS reduced its price target to $60, maintaining a Buy rating, and recognized GitLab’s recovery from previous quarter disappointments with one of the highest growth rates in the software sector.
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