GitLab Earnings Loom Large With Stock (NASDAQ: GTLB) Underperforming

GitLab Inc. (NASDAQ: GTLB), the DevOps platform provider, finds itself at a critical juncture as it heads into its fiscal first-quarter 2026 earnings report, scheduled for after the market closes this afternoon. The stock is currently trading at $48.64, down 6.57% over the past month, and 13.7% since the start of the year.

Since going public, GitLab's stock price fell by ~70% through the first 6 months or so, only to spend much of the subsequent 3 year period consolidating around $50 (albeit with breakouts to both the upside, and downside that failed to hold). Could the latest test of the level prove to be a springboard for future gains, or a deceptive calm before another potential storm?

The market's perception of GitLab is currently a mixed bag. On one hand, the average analyst price target stands at a promising $70.36, suggesting substantial upside potential. Optimistic projections reach as high as $90, while even the most conservative estimates still place the stock at $45.

This positive sentiment is underscored by a recent note from KeyBanc analyst Jason Celino, who reiterated an ‘overweight' rating with a $60 price target, implying a nearly 22% potential gain from current levels. Celino's bullish stance likely contributed to the nearly 4% surge the stock experienced on June 5th, outperforming the broader S&P 500, which declined on the same day.

The upcoming earnings report is therefore poised to be a pivotal moment for GitLab. Analysts are projecting earnings per share (EPS) of $0.12 for the quarter, a significant improvement over the $0.03 reported in the same quarter last year.

Revenue is anticipated to grow by 26% year-over-year to $213.21 million, with full-year revenue expected to reach $941.69 million, representing a 24% year-over-year increase. Achieving these targets is crucial for validating the current positive sentiment and potentially triggering a sustained rally.

Scotiabank and TD Cowen have both decreased their firm's price target on GitLab shares in recent days, yet with an “Outperform” rating and a “Buy” rating respectively. These dropped targets then come with more than a hint of bullish sentiment, with the revised targets continuing to reflect significant upside from the current price ~ $49.

The competitive landscape in the DevOps platform market is becoming increasingly crowded, with established players like Microsoft (GitHub) and Atlassian (Bitbucket) posing significant challenges. GitLab's ability to differentiate itself and maintain its market share in this competitive environment is far from guaranteed. Furthermore, the broader macroeconomic environment remains uncertain, with potential risks such as rising interest rates and a slowing global economy that could negatively impact GitLab's growth prospects.

Looking to the bears for a view, the current consolidation might be a ‘dead cat bounce‘ before another leg down, with the projected growth figures, while impressive, already priced into the stock to a certain extent.

Any disappointment in the earnings report, even a slight one, could trigger a sharp sell-off as investors re-evaluate their positions. Moreover, the reliance on analyst ratings as a primary driver of investment decisions can be a risky strategy.

Ultimately, the fate of GitLab's stock hinges on the company's ability to deliver and execute its growth strategy effectively. The upcoming earnings report will provide crucial insights into the company's progress and help investors determine whether the current consolidation is indeed a launchpad for future gains, or simply a temporary respite before further declines.