Shares in GitLab (GTLB), a software development and collaboration provider, tumbled over 14% on Wednesday afternoon as several Wall Street analysts greeted its estimates-beating Q3 2026 earnings results with price target cuts.
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During the quarter, the California-based company grew its total revenue by 25% year-over-year to $244.4 million, comfortably surpassing the consensus of $239.32 million. The firm also earned 25 cents per share, above analysts’ projection of 20 cents per share — the earnings per share (EPS) rose about 9% from 23 cents per share from a year ago.
Analysts Defend Price Target Cuts
Defending his price target cut, Morgan Stanley analyst Sanjit Singh said the earnings beat was smaller compared to previous ones. Singh also noted that he expects the slower growth seen during the quarter to impact GitLab’s shares.
The analyst cut GTLB from $60 per share to $55, representing over 47% upside potential. However, Singh maintained his Overweight (Buy) rating on the company’s shares, noting that he sees GitLab’s Duo Agent as a possible growth catalyst.
Truist analyst Miller Jump, who lowered his price target from $44 to $42 per share, criticized GitLab’s muted fourth-quarter outlook. GitLab expects revenue between $946 million and $947 million by the end of its current Fiscal Year 2026.
Chipping in, Goldman Sachs analyst Kash Rangan noted that the post-earnings sell-off is a reflection of the software development platform provider’s slowing subscription and remaining performance obligations — that is, contracts yet to be fulfilled. Rangan trimmed his price target to $42 from $48 and reaffirmed his Neutral rating on the stock.
The Goldman Sachs analyst further explained that the fall in GTLB price is evidence of deceleration in net retention rates, the impact of the U.S. government shutdown on the public sector, and weaker demand from its small and medium-sized business clients, among other factors.
Is GTLB Worth Buying?
Across Wall Street, GitLab’s shares currently hold a Moderate Buy consensus rating from analysts. This is based on 19 Buys and seven Holds issued by 26 analysts over the past three months.
At $55.71, the average GTLB price target indicates approximately 50% upside from the current level.
