Here's a classic Wall Street story: a company reports earnings that beat expectations, shows solid growth, and even crosses a major milestone. And then its stock tanks. Welcome to the Wednesday that GitLab Inc. (GTLB) investors had.
The developer platform company delivered what looked like a perfectly good fourth-quarter report. Earnings per share came in at 30 cents, beating the 23-cent estimate. Revenue hit $260.4 million, topping expectations of $252.21 million and growing 23% year-over-year. For the full fiscal year 2026, revenue reached $955.2 million, up 26%, and the company crossed the $1 billion annual recurring revenue (ARR) mark—a big deal for any software-as-a-service business.
Customer metrics looked healthy too. The number of clients generating over $1 million in ARR grew 26% year-over-year to 155. The dollar-based net retention rate held steady at 118%, meaning existing customers are spending more. And total remaining performance obligation, a measure of future revenue, grew 20% to $1.1 billion.
So why did the stock plunge? Because in finance, it's not just about what you did—it's about what you're going to do next. And GitLab's outlook for fiscal 2027 disappointed investors. The company guided for adjusted EPS of 76 to 80 cents. That's well below the $1.05 analysts were expecting. Revenue guidance of $1.1 billion to $1.12 billion came in at the low end of expectations.
Even a new $400 million share repurchase authorization—a move companies often use to signal confidence and return cash to shareholders—couldn't stop the slide. When guidance misses, especially on earnings, investors tend to sell first and ask questions later.
The Technical Picture Looks Rough
If you look at the charts, GitLab's stock isn't just having a bad day—it's in a rough patch. The stock is currently trading 12.5% below its 20-day simple moving average and 15.3% below its 100-day average. That's a bearish signal for the short to medium term. Over the past year, shares have decreased significantly and are trading much closer to their 52-week low of $23.45 than their high.
The Relative Strength Index (RSI) sits at 44.45, which is neutral territory—neither overbought nor oversold. But the MACD indicator is at 0.15, below its signal line of 0.22, suggesting bearish pressure. So you've got neutral momentum with a bearish tilt. Key resistance sits at $30.00, while support is at $23.50.
What Are the Analysts Saying?
The analyst consensus still carries a Buy rating with an average price target of $45.22, but that doesn't tell the whole story. Recently, several firms have taken action that reflects the cautious mood:
- BTIG: Maintained a Buy rating but lowered its price target to $30.00 (March 4)
- Piper Sandler: Downgraded to Neutral and lowered its price target to $28.00 (March 4)
- DA Davidson: Maintained a Neutral rating and lowered its price target to $30.00 (March 2)
So you've got a mix of maintained ratings with lower targets and an actual downgrade. That's not exactly a vote of confidence following the earnings report.
The next major catalyst for the stock will be the earnings report expected on June 9, 2026. Current estimates point to EPS of 11 cents (down from 17 cents previously) and revenue of $251.97 million (up from $214.51 million).
As of Wednesday's premarket trading, GitLab shares were down 9.85% at $24.07, putting them right near that 52-week low. Sometimes in the market, good news isn't good enough—especially when the future looks less bright than investors hoped.
