Gitlab Inc (NASDAQ:GTLB) shares tanked in early trading on Wednesday, despite the company on Tuesday reporting upbeat fourth-quarter earnings.
• GitLab shares are sliding. What’s behind GTLB decline?
Here are the key analyst insights:
- Guggenheim Securities analyst Howard Ma maintained a Buy rating, while reducing the price target from $60 to $50.
- BTIG analyst Nick Altmann reiterated a Buy rating, while cutting the price target from $32 to $30.
- Canaccord Genuity analyst Kingsley Crane reaffirmed a Buy rating, while slashing the price target from $70 to $40.
- Needham analyst Mike Cikos maintained a Buy rating, while cutting the price target from $50 to $32.
- Rosenblatt Securities analyst Blair Abernethy reiterated a Buy rating, while slashing the price target from $55 to $43.
- Cantor Fitzgerald analyst Jonathan Ruykhaver reaffirmed a Neutral rating and price target of $30.
Check out other analyst stock ratings.
Guggenheim Securities: Gitlab reported total revenue of $260 million, up 23% year-on-year, topping consensus of $252 million, Ma said in a note. Subscription revenue came in at $234 million, up 26% year-on-year, above consensus of $227 million, he added.
While Fed deals slipped out of the fiscal third quarter, a few enterprise deals also slipped and NRR growth decelerated by another percentage point sequentially to 118%, the analyst stated. Total revenue guidance came in “about $15M below consensus of $1.1120B at the midpoint,” he further wrote.
BTIG: Gitlab’s revenues came in higher than consensus but included around $3 million in one-time items, Altmann said. Management noted that the company recorded the highest NNARR in its history in the fiscal fourth quarter, he added.
“However, underlying bookings metrics showed more muted strength, with cRPO growing 24% (vs. +28% in 3Q) and RPO growing 20% (vs. +27% in 3Q),” the analyst wrote. The company guided to operating margin of 12% for fiscal 2027, well below consensus of 16.2% and implying around 500 basis points (bps) of margin compression, he further stated.
Canaccord Genuity: Gitlab reported total revenues around $7 million above expectations and non-GAAP operating margin about 500 bps above guidance, Crane said. The company reported record net-new ARR and its over $1 million customer cohort grew 26% year-on-year to 155, he added.
Management’s fiscal 2027 revenue growth guidance of 15%-17% represents “a material deceleration” from the 26% growth reported for fiscal 2026, the analyst stated. “While we certainly view this guidance as a low bar, the reality is that FY27 will likely remain a transitional year from a revenue generation standpoint,” he further wrote.
Needham: Gitlab guided fiscal first quarter revenues of $253-$255 million, well below expectations of $256.3 million, Cikos said. The full-year guidance calls for 15%-17% growth to $1.099-$1.118 billion, short of Street expectations of $1.122 billion, he added.
Fiscal 2027 is set to be “a rebuilding year” that implements management’s five-step plan to “reinvigorate growth” through higher-than-expected expenses, the analyst stated. “We believe the plan is the right one, especially as it pertains to improved sales coverage and unlocking monetization, but it will take time play out,” he further wrote.
Rosenblatt Securities: Gitlab’s subscription revenue grew 26% year-on-year and now represents 90% of total revenue, Abernethy said. “Despite the beat, Gitlab did see softer performance in the U.S. market, continued delays in the U.S. government sector, recovery from the fall shutdown, and some deal slippage,” he wrote.
The company said it has a five-point action plan to drive revenue growth at scale in the coming years, the analyst stated. Although the rollout of Gitlab’s Duo Agent Platform has begun, it is unlikely to have a significant impact on revenues in fiscal 2027, he added.
Cantor Fitzgerald: Gitlab reported solid results, topping consensus estimates on revenue, operating margin, and free cash flows, Ruykhaver said. The company’s profitability continued to improve, with operating margins expanding to 20.2%, from 17.7% in the year-ago quarter, he added.
“The tone of the call positioned FY27 as a rebuilding year, with management focused on scaling sales capacity, reaccelerating first orders, and investing in its Duo Agent Platform to support longer-term growth,” the analyst wrote.
GTLB Price Action: Shares of Gitlab had declined by 7.23% to $24.77 at the time of publication on Wednesday.
Photo: Lori Butcher via Shutterstock
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