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On Friday, TD Cowen analysts adjusted their outlook on GitLab Inc (NASDAQ: GTLB) by lowering the stock’s price target to $75 from the previous $82. Currently trading at $49.52 with a market capitalization of $8.05 billion, the stock maintains a Buy rating from analysts. According to InvestingPro analysis, GitLab is currently trading above its Fair Value.
The analysts pointed to strong demand in the DevSecOps market as a positive factor for GitLab. They noted robust upgrade motions for the company’s Ultimate SKU and increasing traction of its Duo product as indicators of the company’s potential. This is reflected in GitLab’s impressive 88.79% gross profit margin and strong revenue growth of 30.93% over the last twelve months.
GitLab is scheduled to report its first-quarter earnings on June 10, 2025. TD Cowen analysts expressed optimism about the upcoming report, anticipating growth in the high 20% range. They highlighted the company’s valuation as attractive, despite recent sector valuation pressures. InvestingPro subscribers can access 8 additional key insights and a comprehensive Pro Research Report for deeper analysis of GitLab’s financial health and growth prospects.
The adjustment in price target reflects these sector pressures, with the new target based on approximately 10 times the expected enterprise value to calendar year 2026 sales. The analysts reiterated their positive stance on GitLab, emphasizing that negative sentiment surrounding the stock might be exaggerated.
In other recent news, GitLab Inc. is set to release its fiscal first-quarter 2026 earnings report, with analysts expressing varied expectations. KeyBanc analysts maintain an Overweight rating with a $60 price target, highlighting an anticipated 25.9% year-over-year increase in top-line growth and a 10.1% operating margin. Meanwhile, Scotiabank (TSX:BNS) lowered its price target to $67 but kept a Sector Outperform rating, expecting GitLab to show slight upside in its earnings. JPMorgan also adjusted its outlook, reducing the price target to $58 and maintaining a Neutral rating, citing stable demand trends but cautioning about potential strategy changes under new leadership. Piper Sandler remains optimistic, reiterating an Overweight rating and an $85 target, noting GitLab’s strong performance and growth potential.
Additionally, GitLab recently achieved FedRAMP Moderate Authorization for its Dedicated for Government service, a significant milestone that may enhance its growth by facilitating U.S. government customers’ migration to SaaS offerings. Changes in GitLab’s pricing and packaging strategy, offering Duo Code Suggestions and Duo Chat at no additional cost to certain users, have been noted as strategic moves to promote its AI features. Despite some macroeconomic concerns, analysts generally see potential upside for GitLab, with its shares trading at a discount compared to other software companies with similar growth rates. These developments reflect GitLab’s ongoing efforts to adapt and thrive in a competitive landscape.
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