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Morgan Stanley raised its price target for GitLab to $57, up from a previous target of $30. The firm kept its rating at Equal Weight, which means they expect the stock to perform in line with the broader market rather than beating it. This change brings the firm's target above the current average of $50. While the analysts are not yet ready to give the stock a full buy rating, the higher target suggests more confidence in the company's path after its recent earnings report.
Source: Morgan Stanley
GitLab released version 19.4 of its software platform, which introduces new ways for companies to use AI agents across their entire engineering departments. These agents are AI tools that can handle complex tasks like testing code or fixing security flaws on their own, rather than just suggesting text to a developer.
This update is important because it focuses on cost efficiency and control, which are the two biggest hurdles for large companies trying to use AI at scale. If GitLab can make these automated tools cheaper and safer for big enterprises to adopt, it helps the company sell more high-margin AI features to its largest customers.
Source: Business Wire
William Blair raised its rating on the company to Market Perform, which is their way of saying the stock should now perform in line with the broader market. This upgrade follows the company's recent earnings report and its shift toward using AI agents to automate software testing.
While several other analysts also raised their price targets this week, this move is notable because it marks a firm changing its mind about the stock's outlook. The average target across all analysts now sits at about $50, which is close to where the stock is currently trading.
Canaccord Genuity raised its price target for the software company from $40 to $70 while keeping its buy rating. This new target is significantly higher than the average analyst target of $50. The move follows the company's recent shift toward using AI agents to automate software testing. While price target changes are routine, this large increase suggests the firm sees more room for the stock to grow as the company moves toward permanent profitability.
Source: Canaccord Genuity
GitLab reported second-quarter revenue of about $286 million, a 21 percent increase from last year that cleared the $270 million analysts expected. The company earned $0.24 per share, also beating the $0.18 estimate. Management highlighted that net new recurring revenue, the value of new subscription contracts, grew more than 40 percent.
This growth is a good sign for the company's shift toward AI agents, which automate software testing and security. As companies use AI to write more code, they need more robust platforms to manage and secure it. GitLab is successfully positioning itself as that essential control layer, and the strong bookings suggest that its "all-in-one" platform is winning over larger enterprise customers who want to simplify their tech tools.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Management has beaten its own profit targets for eight straight quarters, often by wide margins. This suggests they set a conservative bar that the business consistently outruns as more companies switch to its all-in-one platform.
| Expectation | |
|---|---|
| EPS | $0.20 |
| Revenue | $282M |