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Investing.com - Needham maintained its Buy rating and $55.00 price target on GitLab Inc (NASDAQ:GTLB), currently valued at $7.75 billion, following the company’s second-quarter fiscal 2026 results. According to InvestingPro data, the company maintains impressive gross profit margins of 88.64% and has achieved 29.31% revenue growth over the last twelve months.
GitLab exceeded the high-end of its second-quarter revenue guidance by $9.0 million but kept its fiscal year 2026 outlook unchanged. The company cited incremental softness in the SMB market, which represents approximately 8% of its business, and ongoing go-to-market changes under Chief Revenue Officer Ian Steward. InvestingPro analysis reveals the company holds more cash than debt and maintains a healthy current ratio of 2.48, providing financial flexibility during this transition period.
Management outlined plans to accelerate new logo acquisition and drive additional spending from both new and existing customers. These initiatives demonstrate GitLab’s scale and maturity while highlighting the need for improved sales representative incentive alignment and enhanced scrutiny of pipeline generation and forecasting.
Needham views the go-to-market changes as a necessary evolution for GitLab, though it acknowledges incremental execution risk related to the timing of new sales hires and their approximately 6-9 month ramp period.
The research firm also noted significant turnover in GitLab’s executive leadership team over the past 12 months as a factor in its assessment.
In other recent news, GitLab Inc reported second-quarter revenue of $236 million, marking a 29.2% year-over-year growth and exceeding expectations of around $226.9 million. This strong performance was noted by BTIG, which maintained a Buy rating but lowered its price target to $57 due to concerns about the company’s revenue outlook. UBS also highlighted the 29% revenue growth, revising its price target to $60 while maintaining a Buy rating. Despite the positive revenue results, KeyBanc expressed "incremental execution concerns" related to GitLab’s market strategy and potential AI disruptions, reducing its price target to $53 but keeping an Overweight rating. DA Davidson lowered its price target to $45, attributing some of GitLab’s quarterly success to timing factors rather than fundamental business acceleration, while maintaining a Neutral rating. Additionally, Raymond James reduced its price target to $55 following the second-quarter results, which showed a strong upside compared to expectations, continuing to rate the stock as Outperform. These developments reflect the varying analyst perspectives on GitLab’s recent performance and future prospects.
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