GitLab (GTLB) Stock Forecast & Price Target

GitLab Inc. has demonstrated significant growth, with its Dedicated plan contributing approximately $50 million in Annual Recurring Revenue (ARR), reflecting an impressive year-over-year growth of 92%. For Q3, the company is projected to achieve total revenue of $238.5 million, representing a 22% increase compared to the previous year, primarily driven by subscription revenue which is expected to constitute 90% of total revenue and grow at the same rate. Additionally, GitLab's total Remaining Performance Obligations (RPO) surged by 32% year-over-year to $988.2 million, coupled with a positive adjustment in the FY26 operating margin target to 14.3%, highlighting improving financial health and operational efficiency.

GitLab Inc. has experienced a significant decline in share value, down approximately 28% year-to-date, primarily due to negative sentiment surrounding competitive threats from emerging generative AI tools and limited growth prospects in developer headcounts. The company's financials exhibit vulnerabilities, including a decrease in its dollar-based net retention rate to 121%, highlighting challenges with customer yield and tier upgrades, while concerns over subscription revenue deceleration and increased competition from major players like Microsoft loom large. Additionally, GitLab's current trading multiples reflect a notable discount relative to growth peers, indicating apprehensions about its future growth trajectory amidst a deteriorating macroeconomic environment and execution risks.