Raymond James analyst Adam Tindle downgraded GitLab Inc (NASDAQ: GTLB) from Outperform to Market Perform.

The analyst comments: “We are downgrading GTLB to Market Perform from Outperform as we digest management’s letter to employees released this afternoon outlining an intent for major internal changes in an effort to move GitLab to its second act as a public company. F1Q and FY27 guidance was reaffirmed with this release, and while investors may breathe a near-term sigh of relief on F1Q, this creates risk for the remainder of the year as these changes are meaningful. In short, this includes an attempt to rearchitect the platform while also reducing headcount which we find challenging. The thesis suggests cost savings will be reinvested into technology, but we worry that internal turmoil may chase away top talent and leave GitLab attempting to retool with a reduced and less capable workforce. CEO Bill Staples started in F4Q25 with a plan to focus on new customer acquisition, subsequently pushed a sales-led and product-led growth effort to drive more logos and customer expansion with innovation to shift from breadth-first to depth first in F2Q26, and the resulting outcome was a nearly 40% y/y decline in base customers added, DBNRR falling ~500 bp, and growth rates halving (31% in FY25 to 16% FY27E). While we are tempted to hang in there considering valuation is arguably attractive, we think we will have time to reevaluate this program as investors are unlikely to give management the benefit of the doubt, and potential risk of a more significant deterioration of the business into F2H looms.”

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Shares of GitLab Inc closed at $25.64 yesterday.