Introducing Valuation Models! 
Key Takeaways:
- GitLab stock could reasonably reach over $70/share by early 2028.
- That implies a 55% potential upside from today’s price of about $45.50/share.
- The company is gaining market share in the DevSecOps market with strong revenue growth and improving margins, while still trading at a discount to its historical valuation multiples.
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GitLab (GTLB) is a software platform that helps developers build, test, secure, and deploy code all in one place.
Its all-in-one DevSecOps approach saves time and reduces risk by replacing multiple point solutions with a single, integrated workflow. As more companies embrace cloud-native development and shift security left, GitLab’s platform is positioned to benefit.
While not yet GAAP-profitable, GitLab has been growing revenues at over 30% annually and showing signs of operating leverage. With sticky enterprise customers and high gross margins, the business has strong potential to scale.
We ran a detailed valuation analysis on GitLab stock using TIKR’s Valuation Model to estimate its upside over the next 2.5 years.
Using reasonable assumptions for revenue growth, margin expansion, and a conservative 50x earnings multiple, the model suggests GitLab stock could reach $70.49 per share by early 2028. That would represent a 54.9% total return and an annualized return of 18.4%.
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What GitLab Does
GitLab is an all-in-one platform that replaces fragmented point solutions, making it easier for developers and security teams to collaborate. As companies modernize their software delivery and shift security earlier in the development lifecycle, GitLab’s integrated approach is gaining adoption.
GitLab serves a wide range of enterprise customers, generating revenue primarily through recurring subscription contracts. Its usage-based pricing model and high customer retention help drive predictable growth and margin expansion over time.
What sets GitLab apart is its ability to unify code, CI/CD, security scanning, and infrastructure automation into one platform. With rising demand for secure, efficient software development, GitLab is positioned as a leader in a growing market.
Here’s why GitLab stock could deliver strong returns over the next 2.5 years as it scales revenue and improves profitability.
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.
In our valuation, we’ll simply use analysts’ consensus estimates and break down what analysts think the stock is worth today.
Here’s what we used for GitLab stock:
1. Revenue Growth: 23.1% CAGR
GitLab has grown revenue by 30.9% over the past year and 44.3% annually over the past three years.
We modeled a 23.1% annual growth rate through 2029, reflecting GitLab’s opportunity to expand its enterprise customer base and increase spend per customer as DevSecOps adoption continues.
2. Operating Margins: 14.7%
GitLab’s operating margin over the past year was 10.2%, with significant improvement from deeply negative margins just a few years ago.
We used a 14.7% margin assumption, reflecting continued leverage as the company scales. This forecast assumes better unit economics, improved sales efficiency, and stronger upsell dynamics.
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GitLab’s reported GAAP margins are impacted by high non-cash stock-based compensation (SBC), which is common among fast-growing tech companies. Adjusting for SBC, GitLab’s underlying profitability is already improving, but investors should still monitor dilution risk over time.
If GitLab continues to scale efficiently and limits SBC growth, it could unlock even more shareholder value.
3. Exit P/E Multiple: 50x
GitLab currently trades at around 59x forward earnings, which is well below its historical average of 85x–127x.
We assumed a 50x P/E multiple in our model, which we view as conservative given the company’s high growth rate and expanding margins. If sentiment improves or growth accelerates, the stock could eventually command a higher multiple.
What the Model Says for GitLab Stock
Using the assumptions outlined above, our valuation model estimates that GitLab stock could reach $70.49 per share by early 2028, representing a potential 54.9% upside from its current price of around $45.51.
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This translates to an annualized return of about 18.4% over the next 2.6 years.
The model assumes GitLab continues expanding its platform, improves operating margins through scale, and maintains strong growth within its enterprise customer base.
TIKR’s model forecasts future earnings-per-share by combining revenue growth and margin expansion, then applies a P/E multiple to estimate the stock’s future value.
What Happens If Things Go Better or Worse?
TIKR’s valuation tool lets investors test a wide range of outcomes that a stock like GitLab can see.
Here’s a breakdown of possible returns GitLab could see over the next 5 years (these are just estimates, and nobody knows what the future holds):
- Low Case: Slower customer growth and margin pressure → 15.5% annual returns
- Mid Case: Solid execution with steady margin expansion → 20.3% annual returns
- High Case: Faster revenue growth and higher margins → 30.7% annual returns
Even under the conservative case, GitLab still shows healthy expected returns, while the upside scenario suggests significant outperformance potential.
See analysts’ growth forecasts and price target for GitLab (It’s free!) >>>
GitLab’s earnings growth is likely to be driven by a combination of factors:
- All-in-One Platform Advantage: GitLab integrates planning, coding, security, and deployment into one platform, which reduces tool sprawl and improves productivity for dev teams.
- DevSecOps Tailwinds: As more companies shift left on security and streamline software pipelines, GitLab’s value proposition becomes more compelling.
- Enterprise Growth: GitLab is gaining traction with large enterprises and continues to grow its revenue from high-value accounts.
- Margin Expansion: Operating leverage is improving, with efficiency gains coming from scale, automation, and a growing base of recurring revenue.
How the Street Sees GitLab Stock
Wall Street analysts remain bullish on GitLab, with an average price target of around $63 per share, which implies 39% upside from recent levels.
Analysts are likely encouraged by GitLab’s accelerating operating leverage, high gross margins, and expanding market opportunity in DevSecOps.
Risks to Consider
While GitLab’s long-term outlook is promising, investors should keep these risks in mind:
- Execution Risk: GitLab must continue scaling efficiently while converting enterprise leads into long-term, high-value customers.
- Competitive Pressure: DevOps is a highly competitive market with rivals like Atlassian, Microsoft (GitHub), and open-source tools offering alternatives.
- Stock-Based Compensation: GitLab’s high SBC expense may dilute shareholders if not balanced by strong earnings growth or buybacks.
- Path to GAAP Profitability: Although GitLab is improving cash flow, it remains unprofitable on a GAAP basis, which could weigh on investor sentiment in a tighter rate environment.
- Enterprise Spending Cycles: A slowdown in tech or IT budgets could delay deal closings or contract expansions.
TIKR Takeaway
GitLab presents an attractive opportunity for investors looking to gain exposure to the growing DevSecOps market.
Its unified platform, strong revenue growth, and improving margins position the company to benefit from long-term shifts in how software is developed and secured.
With 55% upside potential over the next 2.6 years, and the possibility of annualized returns above 18%, GitLab could be one of the more overlooked growth stocks in the market today.
The stock is best suited for investors who are comfortable with fast-growing software businesses and are looking for high-upside opportunities backed by recurring revenue and expanding profitability.
Is GitLab stock worth buying over the next 24 months? Use TIKR’s Valuation Model and analyst forecasts to see if the stock is undervalued today.
Value any stock with TIKR’s Valuation Model (It’s free!) >>>
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FAQ Section:
What does GitLab do?
GitLab is a DevSecOps platform that helps software teams plan, build, secure, and deploy code from a single, unified application. Its platform replaces fragmented point tools by combining source code management, CI/CD, security scanning, and deployment in one place.
Is GitLab profitable?
GitLab is not yet profitable on a GAAP basis, primarily due to high stock-based compensation. However, the company is showing strong operating leverage and has improved margins significantly over the past few years. Analysts expect continued progress toward profitability as it scales.
How fast is GitLab growing?
GitLab has grown revenue at over 30% annually in recent years, with a 30.9% increase in the past 12 months alone. Consensus estimates project continued double-digit growth as demand for DevSecOps platforms expands.
What is the upside potential for GitLab stock?
According to TIKR’s valuation model, GitLab stock could reach $70 by early 2028. That implies a 55% total return from today’s levels, or an annualized return of 18%, based on reasonable assumptions for revenue growth, margin expansion, and valuation.
What are the biggest risks to investing in GitLab?
Key risks include intense competition from companies like Atlassian, Microsoft (GitHub), and open-source alternatives, as well as GitLab’s high stock-based compensation, which may dilute shareholders. Additionally, the company’s profitability timeline and reliance on enterprise IT budgets could impact returns if adoption slows.
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!
