Next 6-12 months crucial for prediction platforms like Kalshi and Polymarkets
Investing.com - Guggenheim has reiterated its Buy rating and $70.00 price target on GitLab Inc (NASDAQ:GTLB) ahead of the company’s third-quarter fiscal 2026 results, representing a potential 64% upside from the current price of $42.64. This aligns with the broader analyst consensus, which maintains a Buy recommendation with targets ranging from $44 to $72.
The research firm expects GitLab to exceed consensus estimates for both revenue and earnings in the quarter, partly due to what it considers "de-risked" second-half guidance set by the former CFO. Guggenheim projects total revenue growth of 26% compared to the consensus estimate of 22%, with subscription revenue growing 27% and SaaS revenue increasing 35%. According to InvestingPro data, 19 analysts have revised their earnings upwards for the upcoming period, with the company expected to report on December 8.
GitLab CEO Bill Staples previously outlined three objectives to drive the company’s next growth phase: accelerating new customer acquisition, speeding up expansions, and improving platform capabilities across DevOps, security, and AI. While these initiatives may cause some near-term disruption, Guggenheim believes the benefits will primarily materialize in fiscal 2027. The company’s strong financial position, with more cash than debt and a healthy current ratio of 2.6, provides flexibility to execute these strategic initiatives.
The research firm highlighted that paid seats have grown at double-digit rates year-over-year and at an accelerating pace over the last four quarters. Guggenheim forecasts GitLab will grow 26% in fiscal 2026 and 24% in fiscal 2027, with SaaS growth exiting the fourth quarter at 36% and reaching 32% in fiscal 2027. This projection aligns with GitLab’s historical performance, as InvestingPro data shows the company achieved 28.97% revenue growth in the last twelve months.
Guggenheim views GitLab as an "underappreciated high growth asset" with over 20% free cash flow margin, noting that go-to-market and product developments, including the Duo Agent Platform expected to reach general availability by fiscal year-end, could provide additional upside potential. The company boasts an impressive gross profit margin of 88.52%, though it has faced market pressure with the stock down 24.33% year-to-date. For investors seeking deeper analysis, InvestingPro offers a comprehensive Research Report on GitLab, one of 1,400+ US equities covered with detailed metrics and expert insights.
In other recent news, GitLab is preparing to release its fiscal third-quarter 2026 earnings, with Guggenheim expecting the company to surpass consensus estimates for both revenue and earnings. Guggenheim projects total revenue growth of 26%, with subscription growth of 27% and SaaS growth of 35%, attributing this potential performance to de-risked guidance from the former CFO. Piper Sandler has also reiterated an Overweight rating and $70 price target, citing positive developer trends and conservative guidance as indicators of a strong third-quarter performance.
Meanwhile, GitLab has been the subject of acquisition rumors, with speculation that Datadog might be exploring a takeover bid valued at over $60 per share. This news led to a significant surge in GitLab’s stock, although Cantor Fitzgerald maintained its Overweight rating amid the volatility. Wolfe Research expressed skepticism about the acquisition’s likelihood, which contributed to a decline in Datadog’s stock. Raymond James has kept its Outperform rating and $55 price target on GitLab, acknowledging that while the acquisition rumors are speculative, such a deal could be plausible under the right circumstances.
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