GitLab (GTLB) Stock Tanks After Earnings—Because Beating Estimates Just Wasn’t Enough
Another quarter, another ''beat-and-drop''—GitLab’s shares nosedived despite topping analyst expectations. Wall Street’s fickle algorithms clearly decided ''good'' isn’t ''good enough'' in this zero-sum earnings circus.
DevOps darling GitLab posted solid numbers, but the market yawned and hit sell. Maybe investors were too busy chasing the next shiny AI token to notice actual fundamentals. Classic.
Here’s the kicker: in crypto, we’d call this a ''buy the rumor, sell the news'' play. In traditional markets? Just another Tuesday where growth stocks get punished for… growing.
Confident Investing Starts Here:
- Easily unpack a company''s performance with TipRanks'' new KPI Data for smart investment decisions
- Receive undervalued, market resilient stocks right to your inbox with TipRanks'' Smart Value Newsletter
Sales increased by 26.8% year-over-year, with revenue hitting $214.51 million. This beat analysts’ expectations of $213 million. Revenue growth was primarily driven by an increase in large customers. Indeed, the number of clients that are providing over $5,000 of annual recurring revenue (ARR) jumped 13% year-over-year to 10,104. When looking at customers with over $100,000 of ARR, this cohort grew by 26% to 1,288.
2026 Outlook
Looking forward, management now expects revenue and adjusted earnings per share for FY 2026 to be in the ranges of $936 million to $942 million and $0.74 to $0.75, respectively. For reference, analysts were expecting $941.69 million in revenue along with an adjusted EPS of $0.73.
Is GTLB a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on GTLB stock based on 12 Buys, two Holds, and zero Sells assigned in the past three months. Furthermore, the average GTLB price target of $69.14 per share implies 42.5% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
