GitLab's AI-native platform, expanding SaaS mix and strong enterprise adoption make its stock appealing even after a sharp three-month rally.
GitLab Inc. remains a rumored buyout target, but a $60 offer undervalues its growth and strategic position. The DevSecOps company benefits from generative AI, driving software development complexity demand and 20%+ revenue growth. The company's strong gross margins, cash flow, and $1.2 billion cash balance reduce pressure to accept a low-premium buyout.
GitLab (NASDAQ: GTLB), a firm that offers tools to assist teams in managing their software development lifecycle, experienced a stock increase of 10.6% yesterday following reports that Datadog is contemplating a takeover bid of $60 per share. Nonetheless, aside from this acquisition speculation, we find GTLB stock currently unappealing at its price of approximately $48, mainly due to its elevated valuation compared to its fundamentals.
Gitlab (GTLB) witnessed a jump in share price last session on above-average trading volume. The latest trend in earnings estimate revisions for the stock doesn't suggest further strength down the road.
GitLab offers high growth at reasonable valuations, despite market concerns over generative AI disruption and recent underperformance. GTLB delivered strong Q2 results: 29% YoY revenue growth, expanding margins, and is nearing GAAP profitability with a robust $1.2 billion net cash position. Management guidance looks conservative, perhaps due to the CFO transition.
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Gitlab (GTLB) reported earnings 30 days ago. What's next for the stock?
Shares of GitLab (GTLB) tumbled 9% Thursday, a day after its CFO left to take a similar position at data cloud software company Snowflake (SNOW). The news offset strong results from the software security platform.
GitLab Inc. (NASDAQ:GTLB ) Q2 2026 Earnings Call September 3, 2025 4:30 PM EDT Company Participants Cassidy Fuller-Patterson William Staples - CEO & Director Brian Robbins - CFO & Interim Chief Accounting Officer Conference Call Participants Robbie Owens - Piper Sandler & Co., Research Division Matthew Hedberg - RBC Capital Markets, Research Division Kasthuri Rangan - Goldman Sachs Group, Inc., Research Division Koji Ikeda - BofA Securities, Research Division James Wood - TD Cowen, Research Division Sanjit Singh - Morgan Stanley, Research Division Brian Essex - JPMorgan Chase & Co, Research Division Gray Powell - BTIG, LLC, Research Division Michael Cikos - Needham & Company, LLC, Research Division Jonathan Ruykhaver - Cantor Fitzgerald & Co., Research Division Presentation Operator Good day, everyone, and welcome to today's GitLab Second Quarter Fiscal Year 2026 Conference Call. [Operator Instructions] It is now my pleasure to turn the conference over to Cassidy Fuller-Patterson.
GitLab projects 24% revenue growth in Q2, driven by AI-driven DevSecOps momentum, but faces valuation concerns and tough competition.
Gitlab is having a difficult 2025, contracting by -22% and underperforming its software & service peers and Russell 1000 peers by a large margin. However, we view the current weakness as a good opportunity to get on board. Unified DevSecOps platforms such as Gitlab that facilitate a comprehensive suite of AI-powered software development stand to gain and take market share.
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