Update shared on 20 Feb 2026
Narrative Update
We are holding our GitLab fair value estimate at $34.00, while our modeled future P/E moves modestly higher. This reflects analysts' lower price targets in the $34 to $40 range and their focus on rising competitive pressure, slower expected growth, and sector wide multiple compression.
Analyst Commentary
Recent Street research around GitLab has turned more cautious, with several bearish analysts cutting price targets and downgrading ratings as they reassess expectations for growth, execution, and competitive positioning.
Price targets across multiple reports now cluster in the mid US$30s to around US$40, reflecting concerns around sector wide multiple compression in software, a weaker sentiment backdrop for AI exposed names, and company specific questions on growth durability.
Some bearish analysts point to a difficult setup for GitLab as it manages frequent management changes, evolving AI driven competition, and the impact of earlier pricing actions. Others highlight more attractive opportunities elsewhere in data and developer focused software.
Notably, GitLab has also been removed from at least one conviction list, with attention and conviction shifting toward other software names in adjacent areas.
Bearish Takeaways
- Multiple bearish analysts have cut GitLab price targets into roughly the US$34 to US$40 range following sector wide multiple compression in enterprise software, which tightens the margin for error if growth or margins soften.
- Several downgrades flag increased competitive pressure, especially from larger platforms strengthening AI and regulatory capabilities, which raises the risk that GitLab has to work harder on sales execution and product differentiation to defend growth.
- Bears are focused on execution risks, including uneven go to market performance and changes to sales incentives, which could take time to show results and may weigh on confidence in GitLab’s ability to re accelerate new customer additions.
- Some research frames the next couple of years as a transition period, with expectations for slower growth and a tough setup for the shares as GitLab laps prior pricing moves and operates in a rapidly evolving market. This may cap how much investors are willing to pay on a P/E or revenue multiple basis for now.
What's in the News
- GitLab announced the general availability of GitLab Duo Agent Platform, introducing Agentic Chat and a suite of AI agents and flows that support code generation, reviews, security analysis, CI/CD troubleshooting, and planning across the software lifecycle, with deployment options across GitLab.com, Self-Managed, and Dedicated.
- Agentic Chat is now available in the GitLab Web UI and popular IDEs such as VS Code, JetBrains IDEs, Cursor, and Windsurf. It offers multi step reasoning, autonomous actions, and support for use cases such as issue creation, merge request summaries, vulnerability explanations, and test and documentation generation.
- GitLab introduced GitLab Credits as a virtual currency for usage based products such as Duo Agent Platform. Premium customers receive US$12 of included credits per user per month and Ultimate customers receive US$24 of included credits per user per month, in each case for a limited time. Customers also have the option to purchase additional credits through shared pools or on a monthly on demand basis.
- GitLab provided earnings guidance for the fourth quarter of fiscal 2026, with expected revenue in the range of US$251.0 million to US$252.0 million, and for fiscal 2026, with expected revenue in the range of US$946 million to US$947 million.
- GitLab appointed Jessica Ross as chief financial officer, effective January 15, 2026, succeeding interim CFO James Shen, who will return to his role as vice president of finance.
- GitLab was mentioned alongside Bill as a stock that could benefit from tech buyouts, according to a Barron's piece that highlighted potential acquisition interest across parts of the technology sector (Barron's).
Valuation Changes
- Fair Value: Held steady at $34.00 per share, with no change in the base case estimate.
- Discount Rate: Increased slightly from 8.36% to 8.39%, which implies a marginally higher required return for the equity.
- Revenue Growth: Adjusted modestly from 19.14% to 19.21%, reflecting a very small change in modeled top line expansion.
- Net Profit Margin: Reduced from 12.25% to 11.39%, indicating a slightly more conservative view on future profitability.
- Future P/E: Increased from 41.95x to 45.05x, which implies a somewhat richer multiple on modeled earnings.
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AnalystLowTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystLowTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystLowTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.