Key Takeaways:
- GitLab is capitalizing on the AI transformation in software development that could drive sustained growth and profitability expansion.
- GTLB stock could reasonably reach $69/share in early 2028, based on our valuation assumptions.
- This implies a total return of 78% from today’s price of $39/share, or an annualized return of 26% over the next 2.5 years.
GitLab (GTLB) has emerged as the leading AI-native DevSecOps platform provider, positioned to capture the massive opportunity as enterprises integrate artificial intelligence throughout their software development lifecycles.
GTLB stock benefits from its differentiated positioning as the only AI-native, cloud-agnostic, model-neutral DevSecOps platform capable of running anywhere, including air-gapped environments, while competitors remain focused on narrow point solutions.
The company’s strategic focus on GitLab Duo AI adoption, Ultimate tier expansion, and agentic workflow capabilities represents a fundamental shift toward human-agent collaboration across the entire software development lifecycle.
With initiatives including the upcoming GitLab Duo Workflow launch, FedRAMP Moderate authorization for government customers, and expanding partnerships with AWS and Amazon Q, GitLab continues strengthening its competitive moat.
Additional catalysts include record 49% adjusted free cash flow margins, strong Ultimate tier adoption reaching 52% of total ARR, and 35% quarter-over-quarter growth in new GitLab Duo customers demonstrating accelerating AI monetization.
With exceptional Q1 results showing 27% revenue growth to $215 million and non-GAAP operating margins reaching 12%, GTLB stock maintains momentum as the AI-driven transformation of software development accelerates.
Here’s why GTLB stock could return 26% annually through 2028 as it scales its AI-native platform advantages and captures the expanding DevSecOps market opportunity.
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What the Model Says for GTLB Stock
We analyzed the upside potential for GTLB stock using valuation assumptions based on the company’s unique positioning in the AI-driven DevSecOps transformation and accelerating profitability trajectory.
Analysts see opportunity ahead for GitLab stock, given its comprehensive platform strategy, proven ability to expand margins while scaling, and early leadership in AI-native development workflows.
Its unified data store architecture and contextual AI capabilities provide sustainable competitive advantages while supporting both developer productivity gains and enterprise security requirements.
Based on estimates of 23% annual revenue growth, 14.6% operating margins, and a normalized P/E valuation multiple of about 50x, the model projects GTLB stock could rise from $39/share to $69/share.
That would be a 78% total return, or a 26% annualized return over the next 2.5 years.
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for Gitlab stock:
1. Revenue Growth: 23%
GitLab delivered strong Q1 performance with 27% revenue growth and maintained full-year guidance of approximately 24% growth.
GTLB expects continued momentum from GitLab Duo customer growth increasing 35% quarter-over-quarter, successful AWS partnership expansion, and the upcoming launch of GitLab Duo Workflow agentic AI capabilities.
We used a 23% forecast reflecting GitLab’s position to benefit from the massive AI-driven transformation in software development, where its unified platform approach becomes increasingly advantageous as code volumes and creators multiply.
2. Operating Margins: 14.6%
GitLab demonstrates clear margin expansion with Q1 non-GAAP operating margins of 12.2%, up approximately 1,400 basis points year-over-year from -2.3%.
This improvement reflects operating leverage from the scalable SaaS model and minimal fixed expenses due to remote operations.
The company’s platform approach enables high gross margins (90%) while supporting efficient scaling. Management’s focus on profitable growth and disciplined expense management continues driving operational leverage.
Full-year guidance implies operating margins will continue expanding as revenue scales, with the business model providing flexibility to invest in AI capabilities while maintaining profitability growth.
3. Exit P/E Multiple: 50x
GTLB stock trades at premium multiples reflecting its unique position as the only comprehensive AI-native DevSecOps platform with proven ability to capture the entire software development lifecycle.
We maintain elevated valuation levels given GitLab’s strategic advantages in the AI transformation, comprehensive platform approach that reduces customer acquisition costs, and strong competitive positioning against fragmented point solutions.
Long-term competitive advantages from a unified data architecture, a security-first approach, and expanding AI capabilities should support premium valuations as the market recognizes GitLab’s differentiated value proposition.
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What Happens If Things Go Better or Worse?
Different scenarios for GTLB stock through 2030 show varied outcomes based on AI adoption acceleration and competitive dynamics: (these are estimates, not guaranteed returns):
- Low Case: Slower AI adoption and competitive pressure → 15% annual returns
- Mid Case: Successful Duo monetization and platform expansion → 23% annual returns
- High Case: Market leadership in AI-native development and rapid scaling → 31%+ annual returns
Even in the conservative case, GTLB stock offers strong returns supported by its comprehensive platform advantages and expanding market opportunity in DevSecOps.
The upside scenario could deliver exceptional performance if GitLab Duo Workflow drives widespread agentic AI adoption and the company captures significant market share from fragmented competitors.
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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!
