GitLab Declines 15% YTD: Should You Buy the Stock on the Dip?

GitLab GTLB shares have lost 14.8% year to date (YTD), underperforming the broader Zacks Computer and Technology sector’s 1.3% decline and the Zacks Internet Software industry’s return of 7%.

GTLB shares have underperformed industry peers like ODDITY Tech Ltd. ODD, which has returned a whopping 71.2% over the same period.

GitLab’s sharp stock price decline can be attributed to growing concerns over its ability to sustain growth amid rising AI competition, softening enterprise demand due to economic conditions, and increasing costs tied to its JiHu joint venture, which continues to drag margins without a definitive deconsolidation plan.

Despite these challenges, GitLab continues to experience strong enterprise demand, make advancements in AI and maintain a solid and expanding customer base. The company’s comprehensive DevSecOps platform, led by a broad product portfolio and strategic partnerships, continues to drive long-term growth. These developments highlight GitLab’s commitment to delivering secure, scalable and AI-enhanced solutions, reinforcing its position in the enterprise software development landscape.

GitLab Inc. Price and Consensus

 

GitLab Inc. price-consensus-chart | GitLab Inc. Quote

These factors have helped GitLab somewhat recover, with shares rising 1.8% in the past month.

But do these initiatives make the GTLB stock a Buy? Let us dig deeper to find out.

GitLab Offers Positive Outlook for FY26

For fiscal 2026, GTLB expects revenues of $936-$942 million, indicating a year-over-year growth rate of 24%.

The Zacks Consensus Estimate for GitLab’s fiscal 2026 revenues is pegged at $936.51 million, implying growth of 23.35% on a year-over-year basis.

For fiscal 2026, non-GAAP earnings are expected to be 68-72 cents per share. The consensus mark for earnings is pegged at 70 cents, unchanged over the past 30 days. The estimate suggests a year-over-year decline of 5.41%.

Robust Product Portfolio Aids GTLB’s Prospects

GitLab’s prospects are strengthened by its solid product portfolio, which drives enterprise adoption, boosts developer efficiency and reinforces its leadership in the DevSecOps space.

GitLab Ultimate — the company's top-tier subscription — has become a cornerstone of its revenues, now accounting for 50% of the total annual recurring revenue. This rise is attributed to its comprehensive security and compliance features, which are particularly appealing to large enterprises seeking integrated DevSecOps solutions.

GitLab Duo delivers AI-powered development with smart code suggestions, test automation and security insights. Notably, GitLab Duo Self-Hosted enables private, secure deployment of large language models.

The launch of GitLab 18 is another milestone, bringing deeper AI integration and enhanced capabilities to the company’s DevSecOps platform.

Rich Partner Base Bodes Well for GitLab

GTLB’s rich partner base, which includes the likes of Amazon AMZN and Alphabet GOOGL, is a key catalyst.

GitLab has deepened its alliance with Amazon's cloud division, Amazon Web Services (“AWS”). Another significant development is the integration of GitLab Duo with Amazon Q, AWS's agentic AI solution. This partnership empowers developers to deliver high-quality, secure code more efficiently on AWS, reinforcing GitLab's position in the cloud-based DevSecOps market.
 
GTLB’s expanded integrations with Alphabet’s Google Cloud have strengthened its platform capabilities and broadened its reach, positioning the company for continued success and growth in fiscal 2026.

Here’s Why You Should Buy GTLB Stock

GitLab’s strong enterprise demand, rapid AI-driven innovation and deepening cloud partnerships underscore its competitive edge. The company’s comprehensive DevSecOps platform, backed by GitLab Duo, positions it for sustained growth, operational scale and long-term value creation in modern software development.

Gitlab currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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