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Barclays Downgrades GitLab to Equal-Weight, PT Lowered to $44
ByAinvest
Friday, Sep 5, 2025 9:21 am ET1min read
Barclays Downgrades GitLab to Equal-Weight, PT Lowered to $44
Barclays has downgraded GitLab Inc. (GTLB) to an Equal-Weight rating and lowered its price target (PT) to $44 from $47, according to a recent analyst report [1]. This move comes following the company's Q2 FY2026 earnings report, which showed strong revenue growth but a significant decline in net income.In Q2 FY2026, GitLab reported a 29.2% increase in revenue to $236 million, driven by a 121% net retention rate and robust enterprise adoption [2]. However, the company swung to a $0.06 per share loss, marking a 175% decline from the prior year's profit of $0.08 per share. This loss, along with ongoing financial challenges, has raised concerns about GitLab's long-term profitability.
The stock price reacted to the earnings report, closing down 2.27% on September 3, 2025, despite raised profit guidance. CEO William Staples highlighted strategic investments in AI-native DevSecOps and leadership changes, projecting 23% revenue growth for Q3 2026 [2]. However, the market remains cautious about GitLab's ability to translate its AI-driven strategy into sustainable profitability.
Barclays analysts Raimo Lenschow and Eamon Coughlin noted that while they are encouraged by GitLab's efforts to improve new business growth, the company will be executing these initiatives while looking for a new CFO and with new executives in place [1]. GitLab announced the appointment of Manav Khurana as chief product and marketing officer and Manu Narayan as chief information officer on September 2, following the resignation of CFO Brian Robins, who will take the same position at Snowflake (SNOW) [2].
Other companies in the DevOps space were also affected, with Atlassian (TEAM) falling 1.7% and JFrog (FROG) inching down by 0.5% on Thursday [2].
References:
[1] https://seekingalpha.com/news/4492356-gitlab-sinks-on-second-half-slowdown-but-analysts-remain-positive-on-long-term-setup
[2] https://www.ainvest.com/news/gitlab-da-davidson-lowers-pt-45-50-maintains-neutral-rating-2509/
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