GitLab's DevSecOps Growth Momentum Continues: A Sign for More Upside?

GitLab GTLB is benefiting from strong demand for its DevSecOps platform. Its solutions, such as GitLab Ultimate, Dedicated, and GitLab Duo, play a significant role in driving customer adoption and expanding existing customer relationships. 

This growing demand is reflected in the company’s financial performance. In the first quarter of fiscal 2026, total revenues of $214.4 million increased 27% year over year. 

GitLab’s expanding clientele and market leadership in the DevSecOps platform category are contributing to its growth prospects. In the first quarter of fiscal 2026, customers with more than $5K of Annual Recurring Revenue (ARR) increased to 10,104, up 13% year over year. Customers with more than $100K of ARR increased to 1,288, up 26% year over year, demonstrating GTLB’s ability to attract and retain large enterprise customers.

In the reported quarter, GitLab announced the general availability of GitLab 18, featuring major innovations across core DevOps workflows, security and compliance, and AI capabilities natively integrated into the platform. The company also announced the general availability of GitLab Duo with Amazon Q for Ultimate self-managed customers on AWS. It achieved FedRAMP Moderate Authority to Operate for GitLab Dedicated for Government, under the sponsorship of the GSA.

GitLab benefits from a rich partner network, which includes cloud platforms such as Alphabet’s Google Cloud and Amazon’s cloud arm, Amazon Web Services (AWS), and Zscaler. These platforms are helping it expand its footprint among large enterprise customers.

Gitlab Suffers From Stiff Competition

Gitlab operates in a highly competitive environment. It faces stiff competition from Microsoft MSFT, its principal rival in the DevSecOps space. Other competitors include Atlassian TEAM and other DevSecOps platforms that specialize in various stages of the software development lifecycle.

Microsoft strengthens its position through the seamless integration of GitHub and Azure DevOps. By consistently expanding its DevSecOps capabilities, Microsoft has become a formidable rival, making it even more challenging for GitLab to differentiate itself and sustain its market presence.

Atlassian competes with GitLab in the DevSecOps space through its robust suite of tools like Jira, Bitbucket, and Bamboo, which provides a strong foundation for development and DevOps workflows, including CI/CD.  Atlassian continues to innovate and expand its offerings to maintain its foothold in the DevSecOps market.

Gitlab’s Share Price Performance, Valuation and Estimates

Gitlab’s shares have lost 17.7% year to date against the broader Zacks Computer & Technology sector’s return of 7%.

GTLB Price Performance

GitLab stock is trading at a premium, with a forward 12-month Price/Sales of 7.51X compared with the industry’s 5.74X. GTLB has a Value Score of F.

Price/Sales (F12M)

The Zacks Consensus Estimate for second-quarter fiscal 2026 earnings is currently pegged at 16 cents per share, which has increased by a penny over the past 30 days. This indicates a 6.67% increase year over year.

GitLab Inc. Price and Consensus

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

The consensus mark for fiscal 2026 earnings is pegged at 75 cents per share, which has increased 6.6% over the past 30 days, suggesting 1.35% year-over-year growth.

GitLab currently carries a Zacks Rank #3 (Hold). 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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