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Investing.com - BTIG has lowered its price target on GitLab Inc (NASDAQ:GTLB) to $52.00 from $57.00 while maintaining a Buy rating following the company’s mixed third-quarter results. The new target still suggests significant upside potential from GitLab’s current price of $36.69, which is trading near its 52-week low according to InvestingPro data.
GitLab reported revenue of $244.4 million, representing 24.6% year-over-year growth and exceeding BTIG’s estimate of $239.0 million and the Street consensus of $239.3 million. This performance aligns with GitLab’s impressive 27.35% revenue growth over the last twelve months and exceptional 88.01% gross profit margin. Despite this revenue beat, the company showed deceleration in customer remaining performance obligations (CRPO) growth, which slowed to 28% in the third quarter compared to 31% in the second quarter and 34% in the first quarter.
CRPO bookings growth also slowed to 19% from 23% in the previous quarter, while the fourth-quarter revenue guidance of $251.5 million, representing 19% year-over-year growth, was in line with Street expectations. InvestingPro data reveals that 19 analysts have revised their earnings upwards for the upcoming period, suggesting confidence in GitLab’s future performance despite the growth deceleration.
BTIG noted management’s optimism about early interest in the Duo Agent platform and the potential for AI to expand GitLab’s addressable market long-term. However, the firm cited softness in the U.S. federal sector and continued concerns about small and medium-sized businesses as factors tempering fourth-quarter guidance.
The research firm slightly increased its fiscal year 2026 revenue outlook to account for the third-quarter beat but reduced its fiscal year 2026 revenue estimate by almost 1%, resulting in the lower price target while maintaining its Buy recommendation. According to InvestingPro, GitLab holds more cash than debt on its balance sheet and analysts predict the company will be profitable this year, factors that may support BTIG’s continued bullish stance despite near-term challenges. For deeper insights, investors can access GitLab’s comprehensive Pro Research Report, part of the 1,400+ US equities covered with detailed analysis on the platform.
In other recent news, GitLab Inc reported its fiscal third-quarter results, showcasing a revenue increase of 25% year-over-year to $244 million, surpassing consensus estimates by 2.1%. Despite this revenue beat, calculated billings of $253 million grew by 17% but fell short of Street expectations by 3.7%. The company’s current remaining performance obligation bookings rose by 19% to $659 million. However, GitLab’s fourth-quarter guidance indicated revenue growth below 20% year-over-year, raising concerns among analysts. Wolfe Research responded by lowering its price target to $50 while maintaining an Outperform rating, citing a mixed quarter. Truist Securities also adjusted its price target to $42, maintaining a Hold rating due to growth concerns. Piper Sandler reiterated an Overweight rating with a $70 price target, despite the stock’s 9% drop following the earnings release. Cantor Fitzgerald maintained its Overweight rating and a $60 price target, highlighting GitLab’s strong performance in exceeding FactSet consensus estimates in revenue, operating margin, and free cash flow.
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