GitLab's Growth Holds Steady, But Analyst Lowers Price Forecast On Cautious Outlook

JP Morgan analyst Pinjalim Bora reiterated the Neutral rating on GitLab Inc. GTLB, lowering the price forecast to $62 from $65.

Yesterday, the company reported quarterly earnings of 33 cents per share, which beat the analyst consensus estimate of 23 cents. Quarterly revenue came in at $211.43 million, which beat the analyst consensus estimate of $206.12 million.

GitLab sees first-quarter adjusted earnings of between 14 cents and 15 cents per share, and revenue in a range of $212 million to $213 million.

Bora acknowledges that the fourth quarter was a strong quarter for bookings, with several growth factors continuing to contribute.

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Meanwhile, after adjusting for the pricing benefit, which remains in the low 20s percentage-wise, the analyst writes that the current stock price reflects a “balanced risk-reward” profile.

The analyst highlights that the guidance provided assumes several factors.

First, there is no change in the guidance approach compared to FY25. Second, the guidance assumes no significant shifts in the macroeconomic environment.

Third, GitLab isn’t factoring in extra caution regarding its public sector business, which accounts for 12% of its ARR, mostly tied to the U.S. federal government.

Lastly, while GitLab exceeded its initial FY25 pricing impact estimates of $15 million – $20 million, management expects a similar revenue impact in FY26, though they haven’t specified the exact amount, Bora writes.

Price Action: GTLB shares are trading higher by 5.71% to $59.46 at last check Tuesday.

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