GitLab stock has crashed in the past few months, mirroring the performance of other software companies. GTLB stock dropped to the current $37, down by 50% from its highest level in 2025. This article explores why it has crashed and whether it will rebound.
GitLab stock has crashed as concerns about the software industry remains
The GTLB stock has crashed in the past few months as investors remained concerned about the health of the software industry. It also dropped as investors anticipate that the company will be disrupted by artificial intelligence technology.
The decline mirrors that of other software companies like Salesforce, ServiceNow, Intuit, and Atlassian, which have shed billions of dollars in value.
Analysts believe that the company’s growth will slow down in the coming years. The most recent results showed that its revenue jumped by 25% in the third quarter of last year to $244 million, while its operating margin moved to 18%.
This growth has happened as more companies have moved into its ecosystem. Some of the biggest companies in its ecosystem are Thales, Google, and NVIDIA. It has over 10,475 customers, with 1,405 bringing in over $100k in revenue.
As a result, data compiled by Gartner shows that it is the leader in Magic Quadrant for AI Code Assistants. It is also in the leadership category for DevOps platforms.
Wall Street analysts expect that the upcoming results will show that its fourth-quarter revenue rose by 19% to $252 million, while its annual figure jumped by 24% to $947 million.
Therefore, the consensus view among analysts is that its revenue growth will slow to 19% to $1.13 billion, while its earnings per share will move from $0.9 in 2025 to $1.03.
Additionally, analysts have downgraded the company in the past few weeks. Morgan Stanley downgraded it to equal-weight, with the target moving from $55 to $42. Similarly, Barclays and Cantor Fitzgerald have also downgraded to underweight and neutral.
As a result, the average target for the GitLab stock price has dropped to $50.7 from the $53 three months ago. The consensus was $76 twelve months ago.
On the positive side, the company’s valuation metrics have improved in the past few months, with the forward price-to-earnings ratio to 37. Another positive is that there are unconfirmed rumors that DataDog is considering making a bid for the company. GitLab has been exploring a sale since 2024.
Gitlab share price technical analysis
The daily timeframe chart shows that the GTLB stock price has crashed from last year’s high of $74 to a low of $32.80 this year. It recently dropped and crashed below the key support level at $38.60, its lowest level in April and August last year.
The stock has remained below the 50-day and 100-day Exponential Moving Average (EMA) and the Supertrend indicator. It is now attempting to retest the key resistance level at $38.60.
Therefore, the most likely scenario is where the GitLab stock price continues falling, potentially to the year-to-date low of $32. It will then bounce back later this year as jitters about the software industry wanes.
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