GitLab (GTLB) Stock Forecast & Price Target

GitLab Inc has demonstrated substantial growth potential, as evidenced by a nearly sixfold increase in weekly active usage of GitLab Duo and an upward trend in Ultimate tier adoption, now representing 54% of total annual recurring revenue (ARR). The company raised its fiscal year 2026 revenue guidance to a range of $946-947 million, reflecting a robust year-over-year growth forecast of 25%, which aligns closely with consensus estimates. Management's focus on leveraging the unique benefits of its all-in-one DevSecOps platform positions GitLab favorably against competitors, suggesting the potential for higher valuation multiples as market dynamics evolve.

GitLab faces significant risks associated with inconsistent execution and sluggish growth in its new logo acquisition efforts, as evidenced by a notable decrease in net new customers with over $5K ARR, which fell to 137 from 234 in the previous quarter. The company's non-GAAP operating margin of 17.2% exceeds guidance but is overshadowed by the broader implications of declining sales productivity amidst market challenges, as well as an exacerbated environment due to factors like the federal government shutdown. Furthermore, GitLab's valuation, trading at a 36% discount compared to the Macquarie Growth Software Index, coupled with a non-GAAP gross margin slightly below expectations, further compounds the negative outlook on its financial performance.