Gitlab gains after Rosenblatt initiates coverage with 'buy' rating

Software development platform GitLab GTLB.O shares rise 2.3% to $43.55 premarket

Rosenblatt Securities initiates coverage with "buy" rating; PT to $58

Brokerage says co integrates all key aspects of the Software Development Lifecycle on one platform, offers integrated experience that boosts productivity and reduces friction

Complexity of modern cloud and emerging GenAI applications, along with upsell opportunities, provide significant growth potential for co - Rosenblatt

"The rapid ongoing adoption of generative AI

and emerging Agentic AI solutions impact GitLab in several ways, mostly for the better" - Rosenblatt

Brokerage also notes that GitLab's Ultimate subscription plans, a key revenue source, now account for 25% of paid users, up from 5% in FY20, which indicates upsell potential among their 10,000+ customers, boosting future revenue growth

Rosenblatt expects co's margins to expand to 12.7% this year and mid-teens next; exceed 30% over long-term

24 of brokerages rate the stock "buy" or higher, eight "hold"; their median PT is $60

As of last close, GTLB down 24.5% YTD