Guggenheim Initiates Coverage on GitLab with Buy Rating and $70 Price Target
ByAinvest
Wednesday, Sep 17, 2025 11:35 am ET1min read
GTLB--
GitLab, described as "the leading enterprise-focused DevSecOps platform" by Guggenheim, has a gross retention rate of 95%. The company's paid user base has grown at a double-digit pace over the past year, driven by its Duo AI suite and Ultimate tier. Guggenheim projects revenue growth of 27% in fiscal 2026, above consensus, with further gains expected in fiscal 2027 as new ARR accelerates. The analysts noted that AI code assistants primarily augment developer workflows and complement GitLab's comprehensive DevSecOps platform [1].
In addition to the positive outlook from Guggenheim, GitLab recently announced several key events, including the resignation of CFO Brian Robins and the appointment of new executives. Despite these changes, GitLab's stock price rose 27% in the second quarter of 2025, aligning with broader market trends where the tech-heavy Nasdaq set new record highs [2]. However, the recent executive changes could introduce execution risks that might impact near-term revenue and earnings forecasts.
While GitLab's focus on expanding its AI-driven capabilities presents opportunities for higher margins, rising competition and market saturation concerns could pose challenges. Over the past year, GitLab's total shareholder return, including dividends, declined 8.14%, hinting at potential hurdles the company has faced beyond the immediate news events. Comparatively, the company's performance lagged behind the US market's 1-year return of 19.9% and the US Software industry's 27.4% [2].
GitLab's share price is currently trading at a 17.9% discount to the consensus analyst price target of US$58.64, reflecting investor skepticism regarding the ability to meet growth forecasts. However, Guggenheim's positive outlook on the company's ability to leverage AI tools to enhance demand for software platforms offers a potential upside for investors.
GitLab Inc. (GTLB) is a leading enterprise-focused DevSecOps platform with 95% gross retention. Analysts at Guggenheim initiated coverage with a Buy rating and a price target of $70.00, citing concerns about AI coding assistants replacing developers as "overblown." The firm believes that AI tools will enhance demand for software platforms and that GitLab's paid user base has accelerated at a double-digit pace over the last year, driven by its Duo AI suite and Ultimate tier.
Investors have received a boost from Guggenheim's recent initiation of coverage on GitLab Inc. (GTLB), with the brokerage assigning a Buy rating and setting a price target of $70.00. Guggenheim analysts believe that AI tools will not undermine demand for GitLab's software platforms but rather enhance it. They cited concerns about AI coding assistants replacing developers as "overblown" [1].GitLab, described as "the leading enterprise-focused DevSecOps platform" by Guggenheim, has a gross retention rate of 95%. The company's paid user base has grown at a double-digit pace over the past year, driven by its Duo AI suite and Ultimate tier. Guggenheim projects revenue growth of 27% in fiscal 2026, above consensus, with further gains expected in fiscal 2027 as new ARR accelerates. The analysts noted that AI code assistants primarily augment developer workflows and complement GitLab's comprehensive DevSecOps platform [1].
In addition to the positive outlook from Guggenheim, GitLab recently announced several key events, including the resignation of CFO Brian Robins and the appointment of new executives. Despite these changes, GitLab's stock price rose 27% in the second quarter of 2025, aligning with broader market trends where the tech-heavy Nasdaq set new record highs [2]. However, the recent executive changes could introduce execution risks that might impact near-term revenue and earnings forecasts.
While GitLab's focus on expanding its AI-driven capabilities presents opportunities for higher margins, rising competition and market saturation concerns could pose challenges. Over the past year, GitLab's total shareholder return, including dividends, declined 8.14%, hinting at potential hurdles the company has faced beyond the immediate news events. Comparatively, the company's performance lagged behind the US market's 1-year return of 19.9% and the US Software industry's 27.4% [2].
GitLab's share price is currently trading at a 17.9% discount to the consensus analyst price target of US$58.64, reflecting investor skepticism regarding the ability to meet growth forecasts. However, Guggenheim's positive outlook on the company's ability to leverage AI tools to enhance demand for software platforms offers a potential upside for investors.
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