GitLab (GTLB) Stock Forecast & Price Target

GitLab Inc. is experiencing robust financial growth, highlighted by a 29% year-over-year increase in revenue and a significant improvement in non-GAAP operating margin, which has risen by 960 basis points to 18%. The company's total remaining performance obligations (RPO) have grown 40% year-over-year to $945 million, while current RPO (cRPO) increased 35% year-over-year to $579 million, indicating strong customer demand and retention. Moreover, the shift towards Software-as-a-Service (SaaS), now constituting approximately 29% of revenue and growing at 36% year-over-year, positions GitLab favorably for sustained growth through enhanced adoption and international expansion.

GitLab Inc. is facing significant challenges that may negatively impact its financial outlook, including anticipated flat non-GAAP operating margins and a potential decline in its premium enterprise value/revenue multiple due to changes in market sentiment. Key concerns involve a faster-than-expected deceleration in subscription revenue, intensified competition from major players like Microsoft and ServiceNow, and disappointing traction in work management, which could lead to downward pressure on revenue and margins. Furthermore, the company is projected to experience lower growth rates and margins, resulting in a potential discount to peers and a downside scenario predicting a revenue growth lag of 500 basis points below base case estimates for CY/25, contributing to a negative sentiment towards the stock.