GitLab Downgraded as Price Target Slashed to $28, Shares Drop 8%
Piper Sandler downgraded GitLab to Neutral from Overweight and cut its price target to $28 from $55 after the company issued fiscal 2027 revenue guidance of roughly 16% growth and 12% operating margin, below expectations. GitLab’s shares fell about 8% in premarket trading following the update.
1. Piper Sandler Downgrades Rating
Piper Sandler lowered GitLab’s rating to Neutral from Overweight and reduced its price target from $55 to $28, reflecting concerns over the company’s near‐term outlook.
2. Fiscal 2027 Guidance Below Forecasts
The company forecast roughly 16% revenue growth and a 12% operating margin for fiscal 2027, trailing analyst expectations of about 19% growth and signaling a 500-basis-point margin compression.
3. Q4 Performance Highlights
GitLab reported $260 million in fourth-quarter revenue, up 23% year over year, achieved a 20.5% operating margin, delivered record net new ARR and saw the lowest churn rate in over four years.
4. Analyst Concerns on Investment Pace
Analysts cautioned that expanded sales capacity and AI strategy spending may pressure fundamentals over the next two to three quarters, with meaningful growth acceleration unlikely until late fiscal 2027 or fiscal 2028.