Rosenblatt maintains Buy rating on GitLab, raises PT to $58 from $58.

Rosenblatt maintains Buy rating on GitLab, raises PT to $58 from $58.

GitLab Inc. (GTLB) continues to receive positive attention from financial analysts, with Rosenblatt Securities maintaining its Buy rating on the stock and raising its price target to $58 from the previous $58. This decision comes amidst the company's strong Q2 2026 earnings preview, which is expected to report revenues between $226 million and $227 million, representing a 24% year-over-year (YoY) growth [1].

The positive outlook is driven by several key factors, including GitLab's strong dollar-based net retention rate and expanding clientele. The company's continued investment in innovation across its core DevOps platform, security, and AI-driven solutions is also anticipated to drive growth. The adoption of GitLab Duo, including Duo Enterprise, and the expansion of GitLab Dedicated are expected to contribute to top-line growth [1].

However, despite these positive indicators, GTLB shares have underperformed the broader market, losing 14.8% year to date (YTD) compared to the Zacks Computer & Technology sector's rise of 12.9% and the Zacks Internet - Software industry's growth of 19.5%. Additionally, the stock has underperformed Microsoft (MSFT) shares, which have gained 20.2% YTD [1].

Rosenblatt's decision to maintain its Buy rating and raise the price target reflects confidence in GitLab's ability to navigate market challenges and capitalize on growth opportunities. The analyst firm highlighted the company's strategic AI moves and strong seat expansion as key drivers of its positive outlook.

Investors should be aware of potential challenges, such as one-time expenses and ongoing costs related to the company's China joint venture, Jihu, which could add pressure to its margins. The company's gross margin contracted by 100 basis points in the first quarter of fiscal 2026 [1].

References:
[1] https://www.tradingview.com/news/zacks:7b3c54a96094b:0-gtlb-stock-set-to-report-q2-earnings-a-smart-buy-or-risky-investment/