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Investing.com - Mizuho lowered its price target on GitLab Inc (NASDAQ:GTLB) to $52.00 from $55.00 on Thursday, while maintaining an Outperform rating on the software development platform. According to InvestingPro data, GitLab’s current trading price suggests the stock is fairly valued, with analysts setting targets ranging from $44 to $76.
The adjustment follows GitLab’s second-quarter fiscal 2026 results, which showed total revenue growth of 29% year-over-year, significantly exceeding Wall Street’s expectations of approximately 24%. The company cited favorable linearity and a greater mix shift to self-managed versus Software-as-a-Service (SaaS) offerings as key drivers of the performance. InvestingPro data reveals the company maintains impressive gross profit margins of 89% and holds more cash than debt on its balance sheet.
Despite beating revenue expectations by $9 million in the second quarter, GitLab maintained its full-year fiscal 2026 revenue guidance, implying a meaningful second-half slowdown that contributed to Mizuho’s price target reduction.
The company also announced that Chief Financial Officer Brian Robins will be departing to become the new CFO at Snowflake, creating a leadership transition that investors will need to monitor.
Mizuho indicated that investor sentiment appears overly negative with GitLab trading at approximately 5.5 times calendar year 2026 estimated revenue for expected growth of about 20%, while suggesting the company’s second-half guidance appears conservative even with some go-to-market changes underway.
In other recent news, GitLab Inc reported a 29% increase in revenue year-over-year for the second quarter, reaching $236.0 million, surpassing Rosenblatt’s revenue estimates by approximately 4%. Subscription revenue, which constituted 90% of the total revenue, grew by 30% year-over-year. Despite this growth, GitLab maintained its fiscal year 2026 outlook, noting some softness in the SMB market and ongoing go-to-market changes. Several analyst firms have weighed in on GitLab’s performance, with Rosenblatt, Canaccord Genuity, Needham, and UBS all maintaining a Buy rating on the stock. However, Canaccord Genuity lowered its price target to $70 from $76, and UBS reduced its target to $60 from $73, citing GitLab’s continued revenue growth and the platform’s value proposition. KeyBanc also lowered its price target to $53 from $60, highlighting concerns about GitLab’s go-to-market strategy and potential disruptions from artificial intelligence. Despite these adjustments, GitLab’s revenue growth remains one of the highest in the software sector.
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