Key Takeaways:
- GitLab’s DevSecOps platform is generating powerful customer ROI by accelerating time to market by 15x and feature delivery by 4x.
- Ultimate subscriptions reached 50% of total ARR, driven by increasing security and compliance demands.
- GitLab Duo AI products are rapidly gaining traction with major enterprise customers like Barclays, Capgemini, and CACI.
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Valued at a market cap of $8.8 billion, GitLab (GTLB) stock has taken investors on a roller-coaster ride since its initial public offering. The tech stock went public in 2021 and traded near all-time highs over the next month.
GitLab stock fell from $125 in November 2021 to near $25 in May 2023. It trades around $53 today, which is still 60% below all-time highs.
GitLab delivered a strong close to fiscal year 2025 (ended in January), with Q4 revenue growing 29% year-over-year to $211.4 million and a record non-GAAP operating margin of 17.7%.
The company has established itself as the leading end-to-end DevSecOps platform, helping organizations consolidate their software development toolchain while enhancing security capabilities. For investors following GTLB stock, these results demonstrate an ability to balance growth with improving profitability.
With newly appointed CEO Bill Staples at the helm, GitLab is focusing on three key priorities for fiscal year 2026. These include adding new customers, helping existing customers realize value faster, and accelerating innovation in core DevOps, security, and AI.
The GitLab stock price today reflects growing investor confidence in its platform strategy, but growth opportunities remain as the software development landscape evolves rapidly with AI. The GTLB stock price has shown resilience despite broader market volatility in the software sector.
Let’s examine three key reasons why GitLab stock could deliver substantial returns for investors who understand the company’s unique position at the intersection of DevOps and AI.
1. Powerful Platform Economics Driving GTLB Stock Growth
GitLab’s comprehensive DevSecOps platform generates compelling economic benefits for customers, with documented ROI of over 480% in three years and payback periods of less than six months.
This value proposition is driving rapid adoption of GitLab’s premium offerings, with Ultimate subscriptions now representing 50% of the total annual recurring revenue. Investors tracking GTLB stock should recognize how this platform consolidation strategy differs fundamentally from competitors.
The platform consolidation approach strongly resonates with enterprise customers seeking to simplify their development environments.
According to Gartner’s research cited by management, only about 25% of companies are on a DevOps platform today, and this number is expected to reach 75% by 2027. This massive shift could drive GitLab stock higher over the coming years.
These consolidation trends are driving significant expansion within GitLab’s customer base. In Q4, GitLab closed its largest net ARR deal in company history and added a record number of customers with ARR over $100,000, bringing that total to 1,229 (up 29% year-over-year).
The dollar-based net retention rate remains strong at 123%, with seat expansion accounting for approximately 75% of that growth in Q4. It means that existing customers have increased spending by 23% over the last 12 months.
GitLab’s single-tenant SaaS offering, GitLab Dedicated, is also experiencing tremendous momentum. Dedicated grew approximately 90% year-over-year in Q4 as customers across industries value the flexibility and efficiency of a managed solution.
The GitLab stock forecast looks promising as these platform economics drive top-line growth and margin expansion. In fiscal Q4, GitLab achieved a non-GAAP operating margin of 17.7%, up 960 basis points year-over-year, demonstrating the scalability of its business model.
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2. Security and Compliance Fueling GitLab Stock Momentum
Security has become the primary driver of GitLab’s premium-tier adoption, with customers increasingly recognizing the value of “shifting left” security practices earlier in the development lifecycle.
By integrating security scanning directly into the development process, GitLab enables organizations to identify and address vulnerabilities earlier, reducing risk and remediation costs. This security-first approach should continue to be a key catalyst for GTLB stock in the coming years.
The Ultimate tier, priced at $99 per user per month (compared to $29 for Premium), provides advanced security features including fuzz testing, container scanning, vulnerability assessment, SAST, DAST, and additional compliance capabilities.
In Q4, all seven of GitLab’s largest deals were Ultimate expansions. Notable security-driven wins included Zscaler, a leader in cloud security, which selected GitLab in a competitive bid. What began as a migration opportunity evolved into a strategic decision to standardize on GitLab’s platform for streamlined developer onboarding and enhanced security.
Another compelling example is CACI, a major U.S. government contractor that removed seven-point solutions by consolidating on the GitLab platform. This resulted in 13x faster security scans and 90% savings in toolchain administration costs. In Q4, CACI further invested in GitLab Duo Enterprise to drive additional efficiencies.
AWS Professional Services also expanded its GitLab commitment by moving from the open-source free tier to GitLab Ultimate. They chose Ultimate to help their customer-facing teams deliver solutions while maintaining strict security requirements.
With security concerns only increasing across industries, the GitLab stock price today may not fully reflect the long-term growth potential from continued adoption of Ultimate subscriptions and security-focused add-ons.
Industry analysts predict that the DevSecOps market will expand rapidly as organizations prioritize integrated security throughout the software development lifecycle. This could be a major driver of GTLB stock price appreciation.
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3. AI Innovation Propelling GTLB Stock Forward
GitLab is strategically positioned to capitalize on the AI revolution in software development, with its GitLab Duo AI products gaining impressive early traction.
Unlike standalone code assistants focusing solely on code generation, GitLab’s AI approach extends throughout the software development lifecycle. This comprehensive AI strategy could be a key catalyst for GTLB stock as enterprise adoption accelerates.
The company’s AI portfolio consists of three key products:
- Duo Pro: Code suggestions similar to other code assistants but integrated within GitLab’s platform
- Duo Enterprise: AI capabilities embedded throughout the entire software development lifecycle across approximately 15 different features
- Duo Workflow: An agentic AI solution (currently in private beta) that can autonomously handle tasks like bug fixes, code reviews, and deployments
This comprehensive AI strategy is already driving new business and expansions. In Q4, GitLab secured major Duo-related wins with enterprise customers including Barclays (which purchased 20,000 GitLab Ultimate and Duo Enterprise seats), Capgemini, and CACI.
A key competitive advantage for GitLab in the AI race is its integrated knowledge graph, which provides contextual awareness across the entire software development lifecycle. This allows GitLab’s AI features to understand not just the code itself but also the surrounding issues, security scans, deployment destinations, and organizational policies.
With Duo Workflow entering private beta in March 2025 and expected to reach general availability by the end of the year, the current GitLab stock forecast may not fully account for the revenue potential of these new AI-driven offerings.
For investors following GTLB stock, this AI strategy represents a growth vector that could drive future price appreciation.
Why GitLab Stock Looks Undervalued Today
Analysts have an average price target of $72 for GitLab stock, indicating an upside potential of 35% from current levels.
GitLab’s recent results demonstrate its ability to execute on both growth and profitability. For FY25, GitLab grew revenue 31% year-over-year to $759.2 million while expanding non-GAAP operating margin by 1,050 basis points to 10.2%. Adjusted free cash flow grew 259% to $120 million, highlighting the company’s improving capital efficiency.
With a highly predictable revenue model (RPO grew 40% year-over-year to $945 million in Q4) and multiple growth levers, including new customers, Ultimate upgrades, Dedicated adoption, and AI expansion, GitLab is well-positioned to deliver sustainable growth for years to come.
GTLB stock trades at a forward P/E ratio of approximately 74x, well below its historical 12-month average of 98x.
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Analysts tracking GTLB stock expect adjusted earnings to expand from $0.74 per share in 2025 to $2.01 per share in fiscal 2028. If GitLab stock is priced at 50x forward earnings, it will trade around $100 in early 2027, indicating an upside potential of almost 100% from current levels.
TIKR Takeaway for GitLab Stock
GitLab’s unique position as the most comprehensive DevSecOps platform makes it one of the most compelling enterprise software investments for 2025 and beyond. The convergence of tool consolidation, security prioritization, and AI-driven development creates a powerful tailwind for the company and the GitLab stock.
While GTLB stock may face volatility in the near term due to macroeconomic uncertainties and competitive dynamics in the AI code assistant space, its platform strategy and execution excellence suggest it is well-positioned to capture an increasing share of the DevSecOps market.
The recent appointment of Bill Staples as CEO and Ian Steward as CRO further strengthens GitLab’s leadership team as it scales toward $1 billion in annual revenue, providing further catalysts for GitLab stock appreciation.
Is GitLab stock a buy over the next 24 months? Use TIKR to check the stock’s analyst price targets and 5-year growth forecasts to see if it is undervalued today.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
