Mizuho Securities maintained its positive stance on GitLab Inc (NASDAQ:GTLB), reiterating an Outperform rating and a $62.00 price target.
The firm's confidence in GitLab's prospects is based on recent in-person meetings with the company's CFO Brian Robins and VP of Investor Relations Kelsey Turcotte.
During the discussions, GitLab's management expressed strong confidence in their ability to capitalize on the company's $40 billion total addressable market (TAM).
They also noted the encouraging adoption of Duo Pro, GitLab's GenAI product, and reported broader customer interest than anticipated for its Dedicated SKU, a single-tenant SaaS solution launched last year.
Mizuho's outlook on GitLab is bolstered by the company's potential to execute and expand significantly over the medium to long term.
The optimism is attributed to several factors that could drive the company's growth, including the possibility of expanding its customer base, implementing price increases, and enhancing upsell opportunities.
In other recent news, GitLab reported a significant 31% year-over-year increase in its second-quarter revenue, totaling $183 million, and anticipates a Q3 revenue between $187 million and $188 million.
The company's non-GAAP operating margin also surpassed expectations, reaching 10%. These developments are largely attributed to new customer acquisitions and increased adoption of AI-powered features in their platform.
In other recent developments, Erin Mannix, GitLab's Chief Accounting Officer, has begun a temporary leave of absence for medical reasons. Concurrently, Brian Robins, GitLab's Chief Financial Officer, will assume the additional duties as Interim Chief Accounting Officer, ensuring continuity in the company's accounting operations.
KeyBanc maintained its Overweight rating on GitLab, expressing optimism about the company's growth prospects and market position, particularly following the deployment of GitLab Duo with KeyBank as an early reference customer. However, GitLab is expected to incur approximately $14 million in expenses related to its China joint venture, JiHu.
InvestingPro Insights
To complement Mizuho Securities' optimistic outlook on GitLab Inc (NASDAQ:GTLB), recent data from InvestingPro provides additional context to the company's financial position and market performance.
GitLab's impressive gross profit margin of 89.29% for the last twelve months as of Q2 2025 aligns with Mizuho's positive view on the company's execution capabilities. This high margin suggests GitLab's ability to efficiently convert revenue into profit, which could support its expansion plans in the $40 billion total addressable market.
InvestingPro Tips highlight that GitLab "holds more cash than debt on its balance sheet" and has "liquid assets exceed short term obligations." These factors indicate a strong financial foundation, which could enable the company to invest in growth initiatives such as the development of its GenAI product, Duo Pro, and the expansion of its Dedicated SKU offering.
While GitLab is currently not profitable over the last twelve months, an InvestingPro Tip notes that "analysts predict the company will be profitable this year." This projection aligns with Mizuho's confidence in GitLab's medium to long-term prospects and potential for significant expansion.
For investors seeking a more comprehensive analysis, InvestingPro offers 5 additional tips that could provide further insights into GitLab's investment potential.
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