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Investing.com - Truist Securities lowered its price target on GitLab Inc (NASDAQ:GTLB) to $55.00 from $75.00 on Thursday, while maintaining a Buy rating on the software development platform. The company, currently valued at $7.75 billion, trades at $42.77, with analyst targets ranging from $44 to $76. According to InvestingPro analysis, GitLab appears fairly valued at current levels.
The price target reduction follows GitLab’s second-quarter fiscal 2026 results, which showed strong performance but came with a cautious outlook for the second half of the year. Despite the positive quarterly results, which included impressive 29.31% revenue growth and industry-leading gross margins of 88.64%, the company maintained its previous top-line guidance.
Truist Securities noted that GitLab management identified several factors contributing to their conservative outlook, including weakness in the small and medium-sized business segment and some one-time impacts to self-managed revenue.
The firm also highlighted that GitLab is implementing changes to its go-to-market strategy, which influenced the company’s cautious stance on future performance. These strategic adjustments are occurring as GitLab works to balance its revenue model.
GitLab continues to focus on seat-based growth while developing a model that benefits from both seat and consumption-based elements, according to Truist’s analysis of management commentary. For deeper insights into GitLab’s financial metrics and growth potential, access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, GitLab Inc reported a 29% year-over-year revenue growth in its second-quarter fiscal 2026 results, reaching $236 million, surpassing Wall Street’s expectations. The company attributed this performance to favorable linearity and a shift towards self-managed offerings over Software-as-a-Service (SaaS). Despite these strong results, GitLab maintained its fiscal year 2026 outlook, noting some softness in the SMB market. Piper Sandler, Mizuho, and Canaccord Genuity all adjusted their price targets for GitLab, with Piper Sandler lowering it to $70 while maintaining an Overweight rating, Mizuho adjusting to $52 with an Outperform rating, and Canaccord Genuity setting it at $70 with a Buy rating. Rosenblatt Securities upheld its Buy rating with a $58 price target, highlighting the 30% growth in subscription revenue, which constituted 90% of GitLab’s total revenue. Needham also reiterated its Buy rating and a $55 price target, acknowledging go-to-market changes led by Chief Revenue Officer Ian Steward. These developments follow GitLab’s announcement of leadership changes and its continued momentum in acquiring large customers.
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