Key Takeaways:
- AI-Driven Growth: 35-45% surge in CI pipelines and deployments as AI code generation explodes.
- Price Projection: Based on current execution, GTLB stock could reach $49 by January 2028.
- Potential Gains: This target implies a total return of 39% from the current price of $35.
- Annual Return: Investors could see roughly 18% growth over the next 2 years.
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In fiscal Q3 of 2026, GitLab Inc. (GTLB) just reported revenue of $244 million, growing 25% year-over-year while delivering an 18% non-GAAP operating margin that beat guidance by 5 percentage points.
The company now serves over 10,000 customers with ARR exceeding $5,000, and Ultimate tier adoption has climbed to 54% of total ARR.
CEO Bill Staples is positioning GitLab as the platform to solve what he calls the “AI Paradox”—the challenge companies face as AI tools generate massive amounts of code but struggle with quality, security, and compliance.
The company’s upcoming Duo Agent platform represents a fundamental shift from seat-based pricing to usage-based monetization.
Platform engagement metrics tell a compelling story.
- Key activities, including CI pipelines, deployments, and releases, increased by 35-45% year over year in 2025.
- For customers with ARR over $5,000, usage per seat increased by 20-40% annually.
- This surge reflects downstream effects as AI coding assistants like Cursor and Copilot flood systems with code that still requires GitLab’s validation and deployment infrastructure.
Despite strong fundamentals and positioning at the intersection of DevSecOps and AI, GitLab stock trades at $35, offering meaningful upside for investors who understand the company’s competitive moat.
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What the Model Says for GitLab Stock
We analyzed GitLab’s transformation into an AI-native DevSecOps platform, highlighting its unique positioning within the software development lifecycle.
While competitors focus on code generation, GitLab controls the full workflow from planning through deployment.
The Duo Agent platform, launching in early 2026, will enable customers to build custom agents that leverage GitLab’s rich context: code repositories, dependency tracking, security scans, compliance checks, and deployment pipelines.
This context advantage becomes more valuable as code volumes explode.
GitLab already powers full lifecycle operations for over 50% of the Fortune 100 and hundreds of thousands of organizations across 100 countries.
The company maintains best-in-class gross retention rates while expanding into adjacent AI monetization opportunities.
Using a forecast of 20.7% annual revenue growth and 16.7% operating margins, our model projects the stock will rise to $49 within 2 years. This assumes a 34x price-to-earnings multiple.
That represents compression from GitLab’s historical P/E averages of 57.5x (one year) and 120.8x (three years).
The lower multiple acknowledges execution risks around the first-order sales build-out and the transition to hybrid seat-plus-usage pricing.
The real value lies in GitLab’s ability to monetize the explosion in software activity driven by AI while maintaining its role as mission-critical infrastructure for development teams.
Our Valuation Assumptions
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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 GTLB stock:
1. Revenue Growth: 20.7%
GitLab’s growth centers on two dynamics: expanding its core DevSecOps platform and capturing AI-driven demand through Duo Agent platform.
The company achieved 25% revenue growth in Q3 despite headwinds from SMB weakness and federal government shutdowns.
- The Ultimate tier drove seven of the top ten net ARR deals, with customers such as Indeed and SBI Securities expanding significantly.
- Management expects the Duo Agent platform to open new revenue streams beyond traditional seat-based pricing.
- Platform activity metrics growing 35-45% demonstrate GitLab’s expanding value as AI proliferates.
- The company signed its first Duo Agent platform expansions in Q3, even before general availability.
With 70% of revenue from self-managed customers who require upgrades to access new features, adoption will be gradual but sustainable.
2. Operating margins: 16.7%
The market values GitLab at 36.6x current earnings. We assume the P/E will compress to 34x over our forecast period.
Near-term execution challenges weigh on the multiple. The company must successfully build out its first-order sales organization as it transitions to hybrid pricing models. Results from these initiatives won’t materialize until the second half of fiscal 2027.
As GitLab demonstrates adoption of the Duo Agent platform and converts activity growth into revenue expansion, the company should maintain a premium multiple.
The platform’s strategic position as infrastructure for AI-powered software development justifies a valuation above that of traditional software peers.
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What Happens If Things Go Better or Worse?
DevSecOps platforms face execution risks related to sales capacity and transitions in monetization models. Here’s how GitLab stock might perform under different scenarios through January 2030:
- Low Case: If revenue growth slows to 16% and net income margins compress to 15.3%, investors still see a 46% total return (9.9% annually).
- Mid Case: With 17.8% growth and 16.6% margins, we expect a total return of 94% (18% annually).
- High Case: If AI platform adoption accelerates and GitLab maintains 17.7% margins while growing at 19.5%, total returns could reach 151% (25.8% annually).
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The range reflects execution on the Duo Agent platform adoption, success in building first-order sales capacity, and margin performance as the business model evolves.
In the low case, usage-based pricing adoption disappoints or sales productivity lags expectations.
In the high case, Duo Agent platform becomes a significant revenue driver ahead of schedule, and the company successfully converts activity growth into accelerated monetization.
How Much Upside Does GitLab Stock Have From Here?
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All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
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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!
