"GitLab Faces Challenges Amidst 17% YTD Decline - Is It Still Worth Holding?"

GitLab shares (GTLB) have underperformed the Computer & Technology sector and Internet – Software industry, losing 16.8% in the year-to-date period. Increased competition in AI-enabled DevSecOps from companies like Microsoft (MSFT) has impacted GTLB’s performance, despite strong demand for its DevSecOps platform.

GitLab’s expanding portfolio, including GitLab Ultimate and Duo, has driven customer adoption and expanded relationships. In the first quarter of fiscal 2026, customer ARR increased, showcasing GTLB’s ability to attract and retain large enterprise customers. GitLab also launched GitLab 18, introducing AI-native features across its platform.

The company’s partnerships with Google Cloud and Amazon are helping it reach large enterprise customers. The integration of GitLab’s DevSecOps platform with Alphabet’s Google Cloud services enhances developer productivity, streamlining authentication and application deployment.

GitLab has initiated guidance for the second quarter and fiscal year 2026, expecting revenue growth of approximately 24%. The Zacks Consensus Estimate for GTLB’s earnings and revenues reflects positive trends, with growth expected in both metrics.

Despite strong growth and partnerships, GitLab faces challenges from one-time expenses and increased competition, leading to margin pressure. The company’s stretched valuation is a concern, reflected in a Zacks Rank #3 (Hold) recommendation. Investors may want to wait for a more favorable entry point before accumulating GTLB stock.

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Read more at Nasdaq: Should You Hold on to GitLab Despite the Stock’s 17% YTD Decline?