Morgan Stanley downgraded GitLab (GTLB) to Equal Weight from Overweight with a price target of $42, down from $55. While the firm thinks the major concerns on Gitlab – namely intensifying AI startup competition and risks to developer seat growth – are “overblown,” it thinks it will take time to disprove the bear cases. As such, it sees FY27 as a transition year with a likely further slowdown in growth and sees some near-term tactical risks, such as a below-consensus initial FY27 guidance.
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