scotiabank lowers gitlab stock price target to $67

On Friday, Scotiabank (TSX:BNS) analysts adjusted their price target for GitLab Inc (NASDAQ: GTLB) stock, reducing it to $67 from the previous target of $80. Despite this adjustment, the analysts maintained a Sector Outperform rating for the company. According to InvestingPro data, GitLab’s stock currently trades at $48.77, with analyst targets ranging from $45 to $90.

The upcoming release of GitLab’s first-quarter results on June 10 is anticipated to show slight upside to estimates. Scotiabank analysts expect GitLab to incorporate this into its fiscal year 2026 growth framework. The company has demonstrated strong fundamentals with impressive gross profit margins of 88.79% and revenue growth of 30.93% over the last twelve months, according to InvestingPro. Discussions with partners and attendance at the AI Dev Summit last week provided insights into GitLab’s market position, with growing adoption of GitLab Duo, although some macroeconomic weaknesses were noted.

Investor concerns persist regarding the impact of other generative AI and DevOps tools on GitLab. However, Scotiabank’s findings suggest minimal impact on GitLab and continued evaluation of its Duo product. One GitLab customer, previously not considering Duo, is now evaluating it alongside four other solutions.

GitLab’s shares are viewed as relatively undemanding, trading at approximately 30 times enterprise value to estimated free cash flow for calendar year 2026. Scotiabank’s revised price target reflects a valuation of about 45 times this metric.

In other recent news, GitLab Inc. is gearing up for its fiscal first-quarter 2026 earnings report, with KeyBanc analysts maintaining an Overweight rating and a price target of $60.00. The analysts anticipate a 25.9% increase in year-over-year revenue and a 10.1% operating margin, with any outperformance potentially affecting the company’s full-year guidance. Cantor Fitzgerald echoes this optimism, projecting revenue slightly above the company’s own guidance at $212.6 million and earnings per share at $0.15, aligning with the top end of GitLab’s guidance. Meanwhile, JPMorgan has adjusted its price target for GitLab from $62.00 to $58.00, maintaining a Neutral rating but expecting stable demand trends. Piper Sandler also maintains an Overweight rating with a price target of $85.00, noting GitLab’s strong performance and potential modest upside for the quarter.

GitLab’s recent FedRAMP Moderate Authorization for its Dedicated for Government service is a significant milestone, enhancing its appeal to U.S. government customers. This authorization allows public sector agencies to utilize GitLab’s platform while adhering to strict security and compliance standards. Additionally, GitLab’s pricing and packaging changes, offering AI features at no extra cost, are strategic moves to encourage the adoption of its services. These developments collectively underscore GitLab’s ongoing efforts to strengthen its market position and drive growth.

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