Guggenheim Reiterates Buy Rating on GitLab Inc (GTLB) Ahead of Earnings

Guggenheim analyst Howard Ma reiterated a Buy rating and $70.00 price target on GitLab Inc (NASDAQ: GTLB).

The analyst comments "Key Message: We expect GitLab to easily exceed F3Q26 consensus top and bottom line estimates, due in part to what we believe is de-risked F2H guidance set by former CFO Brian Robins, despite mixed checks, flow the upside to full-year FY26, and guide F4Q26 in line. In our plausible scenario, we’re modeling total revenue growth of 26% vs. consensus +22% (or over 3% potential upside, slightly less than 4% in F2Q), including Subscription growth of 27% (vs. consensus +23%) and SaaS growth +35% (vs. consensus +28% and +39% in F2Q). On the F2Q26 earnings call, CEO Bill Staples outlined three objectives to drive GitLab’s next leg of growth, including both sales and product-led GTM motions to: 1) drive acceleration in new logos, 2) accelerate expansions, and 3) improve platform capabilities across core DevOps, security, and AI. These initiatives are additive and do not require changes to sales commission structures. However, they represent change, nonetheless, while we expect the benefits to manifest primarily in FY27. Management has factored in some modest near-term disruption as a result, as well as continued softness in SMB (about 8% of revenue), which are factored into guidance. On the other hand, management also said that paid seats have grown double digits y/y (including Duo seats) and at an accelerating rate over the last four quarters, which we believe could continue, while pricing is a modest tailwind this year/modest headwind next year (3 percentage points of growth). Altogether, we ultimately see GitLab growing 26% in FY26E and 24% in FY27E, including SaaS growth exiting F4Q at 36% and 32% in FY27E, making for an underappreciated high growth asset coupled with 20%+ FCF margin. GTM and product tailwinds, including Duo Agent Platform (management expects general availability by FY year-end) could provide further potential upside. Maintain Buy and $70 PT."

For an analyst ratings summary and ratings history on GitLab Inc click here. For more ratings news on GitLab Inc click here.

Shares of GitLab Inc closed at $42.64 yesterday.

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