GitLab (NASDAQ:GTLB), a firm that offers tools to assist teams in managing their software development lifecycle, is anticipated to release its Q1 results on June 10. Consensus forecasts indicate revenues nearing $213 million for the quarter, marking a 26% increase compared to the previous year, while earnings are estimated to be around $0.15 per share, nearly 5 times higher than last year.
We initiate coverage on GitLab with a Strong Buy rating driven by underappreciated AI monetization flywheel and accelerating adoption of premium Ultimate and Dedicated modules. Our PT of $125 per share is based on a 15.5x EV/Sales multiple to our FY27 revenue estimate of $1.3bn with justified premium to peers. We estimate FY27 revenue of $1.27bn, or up 25% y/y and +8-10% consensus, fueled by compounding monetization levers.
GTLB eyes a rebound in its shares as strong AI capabilities, cloud integrations, and DevSecOps leadership fuel enterprise adoption and long-term growth.
GitLab offers a compelling high-risk, high-reward opportunity for investors seeking to move up the Efficient Frontier in their portfolios. The company stands out for its deep AI integration, strong customer traction, and growing adoption of its premium subscription tier. Though management gave conservative guidance for FY '26, anecdotal evidence suggests the company is performing very well.
GitLab Inc. (GTLB) deserves a buy rating due to its strong growth outlook, despite recent share price declines not reflecting fundamental weaknesses. The enterprise upsell engine is strengthening, with the Ultimate tier now accounting for 50% of total ARR, showing significant traction with large customers. GTLB's Dedicated SaaS offering is gaining momentum, growing 90% y/y, driven by demand from sectors with strict security and compliance needs.
GTLB shares decline due to macro pressures and competition, but AI-driven DevSecOps adoption and key partnerships are promising.
A number of high-flying growth stocks have come back down to earth following the recent market pullback. Let's look at two that investors can consider buying this year, especially if the market once again starts to head lower.
GitLab excels in DevSecOps with AI integration, offering a unified platform for planning to compliance, attracting enterprise customers and boosting ARR by 52%. Financially strong, GitLab's revenue grew 29% YoY, maintaining a 91% gross margin, and free cash flow surged from $24.5M to $62.1M. GitLab's business model smartly combines open-core and subscription-based SaaS, with a successful "land and expand" strategy driving a net retention rate of 123%.
Gitlab (GTLB) might move higher on growing optimism about its earnings prospects, which is reflected by its upgrade to a Zacks Rank #2 (Buy).
There has been some significant market volatility this earnings season, with disappointing reports spooking some investors. One stock that got a reprieve following its earnings was DevSecOps platform GitLab (GTLB -3.21%), largely because investors liked its continued strong growth.
GitLab benefits from strong DevSecOps partnerships and AI-powered tools, but rising competition and high valuation make it a risky bet for investors.
GitLab stock popped after its Q4 results showed a fantastic 29% y/y growth, with only a modest deceleration to the mid-20s implied by the company's FY26 guidance. GitLab's low market penetration and industry leadership provide significant growth opportunities in the DevOps space. Upsell potential through Premium and Ultimate SKUs and adherence to Rule of 40 principles bolster GitLab's long-term growth prospects.