GitLab's Stock Struggles but Future Looks Promising
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3h ago
0mins
Source: Fool
- Stock Performance Decline: GitLab's share price fell over 10% in 2024 and another 33% in 2025; however, 2026 could be pivotal for the company to prove the bears wrong, indicating market optimism about its future.
- Strong Revenue Growth: The company has consistently achieved revenue growth between 25% and 35% over the past two years, driven by new customer acquisitions and existing customer expansions, with a remarkable 119% dollar-based net retention rate over the past 12 months, highlighting customer stickiness.
- Pricing Model Shift: GitLab is transitioning to a new hybrid seat-plus-usage pricing model aimed at boosting average revenue per user (ARPU), and while investors express concerns over price uncertainty, this strategy is expected to enhance customer loyalty.
- Opportunities from AI: Despite fears that AI may reduce the number of programmers, GitLab is likely to benefit from the trend of vibe-coding, as all code, regardless of the author, must be securely stored and reviewed, ensuring the platform's relevance and security.
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Analyst Views on GTLB
Wall Street analysts forecast GTLB stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for GTLB is 52.61 USD with a low forecast of 40.00 USD and a high forecast of 72.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
25 Analyst Rating
15 Buy
10 Hold
0 Sell
Moderate Buy
Current: 35.500
Low
40.00
Averages
52.61
High
72.00
Current: 35.500
Low
40.00
Averages
52.61
High
72.00
About GTLB
GitLab Inc. provides DevSecOps Platform, is built on a single codebase, unified data model, and user interface. The Company offers customers flexible deployment options, including a self-managed offering, as well as multi-tenant and single-tenant (GitLab Dedicated) software-as-a-service (SaaS) solutions. It offers the DevSecOps Platform in three different subscription tiers, namely Free, Premium and Ultimate. The DevSecOps Platform enables its customers to move their DevOps workflow across any hybrid or multi-cloud environment. Its subscription plans are available as a self-managed offering that customers download to run in their own on-premises environment or hybrid cloud environments, and also a SaaS offering, which is offered as either multi-tenant or single-tenant (called GitLab Dedicated). The Company also provides related training and professional services. Its SaaS products provide access to hosted software as well as support.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
GitLab's Stock Struggles but Future Looks Promising
- Stock Performance Decline: GitLab's share price fell over 10% in 2024 and another 33% in 2025; however, 2026 could be pivotal for the company to prove the bears wrong, indicating market optimism about its future.
- Strong Revenue Growth: The company has consistently achieved revenue growth between 25% and 35% over the past two years, driven by new customer acquisitions and existing customer expansions, with a remarkable 119% dollar-based net retention rate over the past 12 months, highlighting customer stickiness.
- Pricing Model Shift: GitLab is transitioning to a new hybrid seat-plus-usage pricing model aimed at boosting average revenue per user (ARPU), and while investors express concerns over price uncertainty, this strategy is expected to enhance customer loyalty.
- Opportunities from AI: Despite fears that AI may reduce the number of programmers, GitLab is likely to benefit from the trend of vibe-coding, as all code, regardless of the author, must be securely stored and reviewed, ensuring the platform's relevance and security.
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GitLab's Stock Struggles Despite Strong Growth
- Stock Performance Issues: GitLab has seen its stock price decline over 10% in 2024 and another 33% in 2025, despite achieving consistent revenue growth of 25% to 35% over the past two years, indicating market concerns about its future prospects.
- Strong Customer Retention: The company boasts a 119% dollar-based net retention rate over the past 12 months, primarily driven by seat expansion and upgrades to higher-tier services, reflecting the stickiness of its platform and customer loyalty.
- AI Transformation Opportunities: While there are fears that AI may reduce the number of programmers, GitLab is evolving into an end-to-end software development lifecycle platform that leverages AI agents to assist developers, enhancing its competitive edge in secure code storage.
- Attractive Valuation: With a forward price-to-sales ratio of approximately 5.5 times and a forward price-to-earnings ratio of 24.5 times, GitLab appears to have significant upside potential in light of the opportunities presented by AI, although investors remain cautious about its new pricing model.
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