Shrenik Kothari, an analyst from Robert W. Baird, maintained the Buy rating on Gitlab. The associated price target was lowered to $55.00.
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Shrenik Kothari has given his Buy rating due to a combination of factors, including Gitlab’s strong financial performance and strategic initiatives. The company reported a solid fiscal second quarter with a 29% year-over-year increase in revenue and a free cash flow margin of approximately 20%, both surpassing market expectations. Despite some challenges in the small and medium business sector, Gitlab’s seat growth, which contributes significantly to revenue growth, remains robust.
Additionally, Gitlab’s valuation appears attractive, trading at less than six times its enterprise value to estimated 2026 earnings. The company’s focus on expanding its customer base through both sales-led and product-led growth strategies is expected to drive long-term growth. Furthermore, the increase in operating margin guidance reflects confidence in their operational efficiency. These factors collectively underpin Kothari’s positive outlook on Gitlab’s stock.
Kothari covers the Technology sector, focusing on stocks such as Tenable Holdings, Check Point, and Okta. According to TipRanks, Kothari has an average return of 25.6% and a 70.90% success rate on recommended stocks.
In another report released on August 28, Bank of America Securities also maintained a Buy rating on the stock with a $72.00 price target.