Update shared on 09 Dec 2025
Fair value Decreased 6.82%Analysts have modestly reduced their price target on GitLab to about $54 per share from roughly $58. They cite slightly slower expected revenue growth and a lower future earnings multiple for DevOps platforms as AI driven efficiencies temper industry expansion, even as profit margin assumptions edge higher.
Analyst Commentary
Recent research commentary presents a balanced view of GitLab, with analysts weighing its upmarket momentum and platform breadth against a more uncertain demand backdrop as AI driven productivity gains reshape DevOps spending patterns.
Bullish Takeaways
- Bullish analysts highlight GitLab's continued shift upmarket with its Ultimate tier, viewing deeper penetration of large enterprises as a support for durable subscription growth and improved net retention.
- The company is seen as well positioned to capture more workflow consolidation as customers seek integrated DevSecOps and AI enhanced tooling, which could sustain a premium valuation compared with narrower point solution peers.
- Some see leadership changes as an opportunity to refine go to market execution and sharpen product positioning around AI, potentially unlocking better win rates and higher attach on security and compliance modules.
- Despite slower expected headcount growth in development teams, GitLab's broad platform and strategic role in software delivery pipelines are viewed as structural positives that can underpin long term expansion.
Bearish Takeaways
- Bearish analysts prefer to stay cautious in the near term, pointing to uncertainty around where next year's guidance will be set and the risk that management offers more conservative growth targets as AI efficiencies compress seat expansion.
- There is concern that as agentic coding tools and code generation mature, investors will struggle to assess how value is split between AI layers and DevOps platforms, creating valuation overhang and multiple compression risk.
- Commentary on the broader DevOps space indicates that developer headcounts are unlikely to decline meaningfully but may see limited growth, which could cap GitLab's volume driven upside and slow top line acceleration.
- Competitive dynamics remain a watch point, with the evolving landscape in security, MLOps, and AI tooling raising the risk that some budgets shift toward alternative platforms, pressuring GitLab's share gains and pricing power.
What's in the News
- Datadog is reportedly working with Morgan Stanley to explore a renewed takeover bid for GitLab, with a potential offer discussed at over $60 per share, following earlier sale discussions reported by Reuters (Street Insider, Reuters).
- An M&A focused Betaville alert has circulated fresh market rumors around GitLab, adding to speculation about potential strategic interest in the company (Betaville via The Fly).
- GitLab issued new guidance, projecting fourth quarter revenue of approximately $251 million to $252 million and fiscal 2026 revenue of about $946 million to $947 million, reinforcing expectations for continued top line growth.
- The company appointed Jessica Ross as chief financial officer, effective January 15, 2026, succeeding interim CFO James Shen and signaling a focus on seasoned financial leadership as GitLab scales.
- GitLab released its annual Global DevSecOps report, highlighting an AI paradox in which faster coding collides with tool sprawl and compliance complexity, and underscoring growing demand for integrated DevSecOps platforms.
Valuation Changes
- Fair Value Estimate has fallen modestly to about $53.67 per share from roughly $57.59.
- Discount Rate has risen slightly to approximately 8.46 percent from about 8.39 percent, reflecting a marginally higher perceived risk profile.
- Revenue Growth has been revised down to roughly 18.23 percent from about 19.62 percent, indicating slightly slower expected top line expansion.
- Net Profit Margin has increased slightly to around 12.69 percent from approximately 12.35 percent, implying a modestly stronger long term profitability outlook.
- Future P/E Multiple has declined to about 67.7x from roughly 72.8x, pointing to a somewhat lower valuation framework for GitLab's earnings power.
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