GitLab's Growth Holds Steady, But Analyst Lowers Price Forecast On Cautious Outlook

Core Viewpoint - JP Morgan analyst Pinjalim Bora maintains a Neutral rating on GitLab Inc. and lowers the price forecast to $62 from$65, despite the company reporting better-than-expected quarterly earnings and revenue [1][4]. Financial Performance - GitLab reported quarterly earnings of 33 cents per share, surpassing the analyst consensus estimate of 23 cents [1]. - Quarterly revenue reached $211.43 million, exceeding the analyst consensus estimate of$206.12 million [1]. Future Guidance - For the first quarter, GitLab anticipates adjusted earnings between 14 cents and 15 cents per share, with revenue projected in the range of $212 million to$213 million [1]. - The guidance assumes no significant changes in the macroeconomic environment and maintains the same approach as FY25 [3]. Market Position and Risks - The fourth quarter was noted as strong for bookings, with several growth factors contributing positively [2]. - The current stock price reflects a "balanced risk-reward" profile after adjusting for pricing benefits, which remain in the low 20s percentage-wise [3]. - GitLab's public sector business, which constitutes 12% of its Annual Recurring Revenue (ARR), is not factoring in extra caution, primarily tied to the U.S. federal government [4]. - Management exceeded initial FY25 pricing impact estimates of $15 million –$20 million but expects a similar revenue impact in FY26 without specifying the amount [4].