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Tuesday – KeyBanc Capital Markets has initiated coverage on GitLab Inc (NASDAQ:GTLB), assigning an Overweight rating with a price target of $70.00 for the shares.
The firm’s analysis suggests that GitLab, a company that operates as an independent DevSecOps platform, is poised for sustained mid-20% growth. This projection is based on the current stable-to-improving spending environment and several near-term catalysts that could potentially boost growth to over 30% in fiscal years 2025 and 2026.
The near-term catalysts identified by KeyBanc include the launch of Duo Pro, GitLab Dedicated, an increase in Premium Tier Pricing, and a strategy focused on converting free users to paid subscriptions. These factors are expected to contribute to the company’s revenue growth and market position.
KeyBanc’s price target of $70.00 for GitLab’s shares is informed by an 11.5 times multiple on the company’s expected fiscal year 2026 enterprise value to sales ratio. This valuation represents a slight premium relative to peers in the 20%+ growth category, justified by GitLab’s extensive platform reach.
GitLab Inc’s strategic positioning as the broadest independent DevSecOps platform is highlighted as a key strength. The company’s comprehensive platform is seen as a competitive advantage that can drive sustained growth and market share gains in the rapidly evolving software development sector.
The financial outlook for GitLab anticipates that the identified catalysts and market conditions will support the company’s growth trajectory. If these factors align as projected, GitLab could experience an acceleration in growth, potentially surpassing the mid-20% range in the next two fiscal years.
The Overweight rating reflects KeyBanc’s confidence in GitLab’s ability to outperform the broader market, based on the company’s growth prospects and strategic initiatives.
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