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GitLab Stock (GTLB) Good Growth and Good Value (Q1 2026 Earnings)

In an era where software development is becoming increasingly AI-driven and security-conscious, GitLab Inc. (NASDAQ: GTLB) stands out as a leading DevSecOps platform. The company recently reported its Q1 Fiscal Year 2026 earnings with strong revenue growth, improving margins, and EPS increase. For investors seeking a blend of growth potential and sound valuation, GitLab’s latest results present a compelling opportunity. In this article we will dive into GitLab recent earnings, stock performance & valuation, growth potential, and the risks investor should consider.

GitLab (GTLB)

About GitLab

Founded in 2014 by Dmytro Zaporozhets and Sytse Sijbrandij, GitLab Inc. operates a unified, cloud-native DevSecOps platform that allows organizations to plan, build, secure, and deploy software in a single application. With over 50 million registered users and a presence in more than half of the Fortune 100, GitLab’s all-remote model and global developer footprint underpin its agile, scalable infrastructure.

GitLab Financial Performance

GitLab’s Q1 fiscal year 2026 results, covering the quarter ending April 2025, reinforced its strong financial trajectory. GitLab reported Q1 FY2026 revenue of $214.51 million, marking a 26.79% year-over-year increase from $169.19 million in Q1 FY2025. Although GitLab continues to operate at a GAAP net loss, the company is showing meaningful progress toward sustained profitability. For Q1 FY2026, earnings per share (EPS) came in at -$0.22, significantly improved from -$0.35 a year ago, a 37.14% reduction in net loss. On a trailing twelve-month (TTM) basis, revenue reached $804.57 million, a 29.31% increase compared to $622.22 million a year ago. EPS TTM turned positive at $0.08, a remarkable shift from –$2.75 in the previous year. This 102.91% improvement signals efficient cost management and improving operational leverage as GitLab scales.

GitLab’s gross profit margin stands at a high 88.64%, consistent with typical SaaS industry leaders, indicating the scalability of its platform and software delivery model. The company also achieved a net profit margin of 1.62%, crossing into profitability territory and showing promising signs of sustainable financial health.

Return on Assets and Return on Equity remain modest but positive at 0.9% and 1.89%, respectively. These figures, while not yet high, underscore the company’s progress in turning growth into earnings, especially given GitLab’s capital-efficient model and lack of long-term debt reflected by a no Debt-to-Equity ratio, indicating a debt-light balance sheet.

Over the past five years, GitLab's revenue has been growing at a 48% CAGR. Net income has started to turn positive, while free cash flow has continued to fluctuate.

GitLab Financial 2020-2025

GitLab Fiscal 2026 Financial Forecast

Looking ahead, analyst consensus estimates for FY2026 project revenue of $942.87 million, representing a 24.18% increase from FY2025’s $759.25 million. On the earnings side, analysts expect a non-GAAP EPS of $0.75, up slightly from $0.74 in FY2025, a 1.7% increase. This signals that GitLab is stabilizing earnings while continuing to grow its top line significantly.

Market sentiment remains favorable, with analysts assigning a Strong Buy rating. The average 12-month price target is $63.22, implying a 53.33% upside from current levels. Notably, the highest target price of $85 reflects potential upside of 106.23%, suggesting that analyst sees significant opportunity if GitLab stock valuation expand significantly.

GTLB Stock Price Performance and Valuation

At the time this article was written, the stock is trading at $41.23. Over the past year, GitLab's stock has faced a modest decline, with its share price dropping 8.84% underperforming the S&P 500, which gained 10.06% during the same period. Since its initial public offering (IPO) in October 2021, GitLab's stock has decreased by 64.15%, while the broader S&P 500 has risen 33.9%. This underperformance may seem concerning at first glance, but it also presents a compelling opportunity for long-term investors, especially considering the company’s financial performance and valuation.

GTLB Stock vs S&P 500 2024-2025

GTLB Stock vs S&P 500 2020-2025

From a valuation perspective, GitLab is priced with a trailing twelve-month (TTM) price-to-sales (P/S) ratio of 8.31, and a forward P/S ratio of 7.22, which is reasonable for a high-growth software company with gross margins nearing 90%. Although the non-GAAP TTM price-to-earnings (P/E) ratio is 46.85 and the forward P/E stands at 54.78, these elevated figures are typical for premium SaaS companies that are in the early stages of profitability but possess significant expansion potential.

Based on FinChat data, if we look at the valuation since 2022, the forward P/S is significantly below the average. In May 2023, it reached its lowest level and then the stock has gone up 150%. A similar scenario could be possible, as GitLab's financial metrics continue to grow significantly.

GitLab Valuation

GitLab Growth Potential

GitLab’s growth prospect remain robust, driven by several factors.

  • Customer Growth and Expansion Metrics
    GitLab's customer base continues to expand robustly, with the total number of customers generating more than $5,000 in Annual Recurring Revenue (ARR) reaching 10,104, up 13% year-over-year. More significantly, high-value customers with ARR exceeding $100,000 grew by 26% year-over-year to 1,288, demonstrating strong enterprise traction.
    The company maintains a healthy Dollar-Based Net Retention Rate of 122%, indicating strong expansion within existing customer accounts. This metric reflects that 80% of expansion comes from seat growth, 15% from platform upgrades, and 5% from improved customer yields. The Total Remaining Performance Obligation (RPO) surged 40% year-over-year to $955.1 million, while current RPO increased 34% to $584.8 million.
  • Market Position and Competitive Advantages
    GitLab operates in a substantial total addressable market estimated at $40 billion, with the company currently holding approximately 2.2% market share, suggesting significant room for expansion. According to Value Market Research. The DevSecOps market itself is projected to grow at a compound annual growth rate of approximately 29% through 2033.
    The company has been recognized as a leader by independent research firms, with Forrester noting that "GitLab is the most all-in-one of the all-in-one solutions and suits enterprises looking to standardize with a single purchase". This positioning addresses the growing demand for platform consolidation, as 64% of organizations want to consolidate their toolchains and 70% report it takes more than a month to onboard new developers.
  • AI-Driven Growth Strategy
    GitLab's strategic focus on becoming the leading AI-native DevSecOps platform represents a key growth driver. The company has integrated AI capabilities throughout its platform with GitLab Duo, which includes Code Suggestions and Chat features now available at no additional cost for Premium and Ultimate customers.
    Customer adoption of AI features shows strong momentum, with a 35% quarter-over-quarter increase in customers purchasing GitLab Duo for the first time. The company's AI strategy includes both immediate productivity enhancements and future agentic AI capabilities, with GitLab Duo Workflow expected to launch in winter 2025.

Risks to Consider

While GitLab looks like a compelling opportunity, we should be mindful of potential risk.

  • Slowing Revenue Growth
    GitLab's revenue growth has slowed, with a year-over-year increase of 26.8% in Q1 2026, down from previous quarters of 29.09%. Additionally, the net revenue retention rate dropped from 129% to 122%, signaling reduced success in upselling and expanding revenue from existing customers. This deceleration highlights challenges in maintaining strong growth momentum and customer expansion, which may affect the company’s future financial performance and investor confidence.
  • Cautious Forward Guidance
    GitLab’s revenue guidance for Q2 and the full fiscal year 2026 slightly missed analyst expectations, raising concerns about the company’s growth sustainability. GitLab sees second-quarter adjusted EPS of between 16 and 17 cents, versus the 16 cent estimate, and revenue of between $226 million and $227 million, versus the $227.16 million analyst estimate. While Q1 results beat estimates, the cautious outlook contributed to a stock decline. Additionally, the GAAP still in net loss, underscoring ongoing profitability risks despite improvements in operating margins and revenue growth.
  • Intense Competition
    GitLab faces fierce competition from major players like Microsoft’s GitHub and AWS DevOps tools. While GitLab offers an all-in-one DevSecOps platform covering the entire DevOps lifecycle, GitHub is widely popular with a strong community and a more intuitive interface. Failure to differentiate, particularly by enhancing AI-powered features, could threaten GitLab’s market share as competitors continue to innovate and expand their offerings. 

Conclusion

GitLab’s Q1 FY 2026 earnings underscore its successful pivot toward profitability, with a 27% revenue increase, improving margins, and improved EPS. While its share price currently lags behind broad markets, the fundamentals are falling into place: AI innovation, large customer penetration and robust platform strength. Competitive pressures and execution execution risks exist, yet GitLab’s financially disciplined, product-rich model makes it a strong candidate for long-term investment.

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