GitLab (GTLB) Stock on December 3, 2025: 14% Post‑Earnings Selloff, Analyst Target Cuts and AI‑Driven Growth Story

GitLab Inc. (NASDAQ: GTLB) shares are under heavy pressure on December 3, 2025, as investors digest the company’s latest quarterly results, cautious guidance, and a wave of fresh analyst reactions.

After reporting fiscal Q3 2026 (quarter ended October 31, 2025) earnings on December 2, GitLab stock fell roughly 14% to around $37.40 per share, trading between $35.81 and $38.80 during the session and hovering just above its new 52‑week low of $35.81, far below its 52‑week high of $74.18. ^[1] At this level, GitLab’s market capitalization is roughly $6.3–$6.4 billion. ^[2]

Despite the selloff, GitLab continues to deliver strong top‑line growth and improving non‑GAAP profitability, while doubling down on its AI‑native DevSecOps platform. The tension between those fundamentals and near‑term growth concerns is at the core of today’s market reaction.

Key takeaways for GitLab stock today

Stock reaction: GitLab closed near $37.40 on December 3, down about 14% from the prior close of $43.37, after trading as low as $35.81. ^[3]
Earnings beat, but swing to loss: Q3 FY2026 revenue grew 25% year over year to $244.4 million, ahead of expectations, but GitLab swung to a GAAP net loss of $8.3 million (–$0.05 per share) versus a $29.1 million profit ($0.17–$0.18 per share) a year ago. ^[4]
Profitability improving on a non‑GAAP basis: Non‑GAAP EPS came in at $0.25, topping consensus of about $0.20, and the non‑GAAP operating margin expanded to 18% from 13% a year earlier. ^[5]
Guidance seen as conservative: GitLab guided Q4 FY2026 revenue to $251–$252 million and full‑year revenue to $946–$947 million, modestly below prior Street expectations near $258 million for Q4 and $960 million for the year, even after the raise. ^[6]
Full‑year EPS outlook corrected lower: A corrected company release now calls for non‑GAAP diluted EPS of $0.88–$0.89 for FY2026, not the earlier 0.95–0.96 figure some reports cited. ^[7]
Analysts cutting price targets, not abandoning the story: Mizuho, KeyBanc, Goldman Sachs, BTIG and Barclays all trimmed price targets today, generally into the $42–$52 range, while consensus still sits around the mid‑$50s with an overall “Buy” bias. ^[8]
Options and volatility spike: Call option volume surged more than 70% above average, and short‑term implied volatility is elevated, underscoring heightened uncertainty around the next leg for GTLB. ^[9]

Price action: GitLab among today’s biggest tech losers

In an otherwise constructive market session—S&P 500 futures were modestly higher Wednesday morning—GitLab stood out on the downside. Pre‑market, the stock was already indicated down roughly 8–9%, making it one of the weakest names in technology benchmarks. ^[10]

By the close of regular trading on December 3, GitLab had dropped to around $37.40, down more than $6 per share from Tuesday’s close of $43.37. ^[11]

Key trading stats today:

Day range: $35.81 – $38.80 ^[12]
52‑week range: $35.81 – $74.18 ^[13]
Volume: ~14.7 million shares, well above normal daily turnover. ^[14]

Analytics site Finbox estimates that GitLab now trades at roughly 65% of its 52‑week high, highlighting how far sentiment has retreated from earlier peaks. ^[15]

Q3 FY2026 results: strong growth meets a GAAP loss

GitLab’s Q3 FY2026 (quarter ended October 31, 2025) report is a classic “good, but not good enough” story:

Revenue and margins

Revenue: $244.4 million, up 25% year over year from $196.0 million and slightly ahead of consensus (~$239–$244 million depending on source). ^[16]
GAAP gross margin: 87% (down from 89%).
Non‑GAAP gross margin: 89% (down from 91%).
GAAP operating margin: –5%, a marked improvement from –15% a year ago.
Non‑GAAP operating margin:18%, up from 13%, reflecting operating leverage as expenses grow slower than revenue. ^[17]

Profitability and cash flow

GAAP net income: loss of $8.3 million (–$0.05 per share) vs. profit of $29.1 million a year earlier. ^[18]
Non‑GAAP net income:$43.5 million, up from $39.1 million, with non‑GAAP EPS of $0.25 versus about $0.20 expected. ^[19]
Operating cash flow: $31.4 million;
Non‑GAAP adjusted free cash flow: $27.2 million. ^[20]

On a trailing‑twelve‑month basis, GitLab has generated around $906 million in revenue with a net loss of roughly $46 million, and the stock currently trades at a forward P/E near 39x based on consensus forecasts. ^[21]

Customer metrics and backlog

Management highlighted continued strength in large‑customer adoption:

Customers with >$5,000 ARR: 10,475, up 10% year over year.
Customers with >$100,000 ARR: 1,405, up 23% year over year.
Dollar‑based net retention: a robust 119%, indicating material expansion within the existing base.
Remaining performance obligations (RPO):$1.0 billion, up 27% year over year; current RPO (cRPO) up 28% to $659.1 million. ^[22]

Taken together, Q3 showed healthy demand, better operating efficiency, and solid cash generation, even as GAAP profitability remains elusive.

Guidance: raised, but still shy of bullish expectations

The heart of today’s selloff lies in GitLab’s outlook.

Q4 FY2026 guidance

For the current quarter, GitLab expects: ^[23]

Revenue: $251–$252 million
Non‑GAAP operating income: $38–$39 million
Non‑GAAP diluted EPS: $0.22–$0.23

ChartMill and other data providers indicate that Wall Street was looking for closer to $257–$258 million in Q4 sales, so the revenue guide is a touch below the prior consensus despite solid Q3 execution. ^[24]

Full‑year FY2026 guidance (corrected)

In its corrected release, GitLab guided for full‑year FY2026: ^[25]

Revenue: $946–$947 million (raised from prior guidance and ahead of the company’s earlier range, but below some bullish external models).
Non‑GAAP operating income: $147–$148 million.
Non‑GAAP diluted EPS:$0.88–$0.89 (updated downward from a previously stated 0.95–0.96 due to a clerical correction).

Some early media coverage still references the $0.95–$0.96 EPS figure, but investors are now working off the corrected $0.88–$0.89 range disclosed by the company.

The combination of 25% revenue growth, expanding margins, but only modest upside to Street estimates led many commentators to describe the quarter as a “beat and soft raise” — a profile that often triggers profit‑taking when stocks are priced for perfection.

Why GitLab stock is falling despite an earnings beat

Several themes recur across today’s commentary from financial media and analysts:

1. Mixed message: strong Q3, cautious tone

Articles from outlets such as Barron’s, RTTNews and others note that GitLab’s Q3 beat both revenue and non‑GAAP EPS expectations, yet investors were disappointed by the outlook and by the swing back to a GAAP loss. ^[26]

Year‑over‑year revenue growth remains solid at 25%, but is noticeably below the hyper‑growth rates some investors once associated with DevOps and AI‑adjacent names. ^[27]
Several articles point out that Q4 and full‑year revenue guidance are only slightly above prior company targets and actually below prior consensus, suggesting a more cautious stance heading into 2026. ^[28]

2. Demand headwinds in public sector and SMB

Barron’s cites GitLab’s softness in the public sector, linking it in part to the impact of a prolonged U.S. government shutdown on deal timing and budgets. ^[29] The company also flagged ongoing challenges with small and mid‑sized business (SMB) customers, where macro uncertainty has led to tighter spending.

That combination makes some investors worry that growth may be more cyclical than previously assumed, particularly in segments that were counted on to drive incremental adoption of GitLab’s platform.

3. Competition and AI disruption risk

Analysts quoted in Barron’s warn about intensifying competition, especially around AI‑assisted development tools, as established players and startups alike roll out their own code assistants and DevSecOps platforms. ^[30]

GitLab has responded aggressively with GitLab 18 and 18.5, which embed AI‑native capabilities across the platform and introduce “Duo” AI agents to support every stage of the software lifecycle. ^[31] However, the Street is debating whether this will translate into accelerating growth or merely help GitLab defend share in a rapidly crowding field.

4. Valuation compressing toward peers

Before earnings, GitLab traded at a premium multiple to many software peers. Even after today’s drop, one analytics provider pegs the stock’s forward P/E at around 39x, reflecting expectations of continued growth and margin expansion. ^[32]

With growth guidance now a bit more restrained and macro headwinds lingering, some investors are recalibrating what they are willing to pay for GitLab’s story.

Analyst reactions on December 3, 2025

Sell‑side analysts moved quickly to update their models after the Q3 report, and the tone today is cautiously constructive rather than outright bearish.

Fresh target cuts

According to reports and data aggregators:

Mizuho (Gregg Moskowitz) maintained a Neutral rating but cut its price target from $52 to $47, citing modest revenue growth and potential threats from AI‑driven competitors. ^[33]
KeyBanc (Jason Celino) kept an Overweight rating but trimmed its target from $53 to $49, highlighting conservative guidance and challenges in SMB and public‑sector segments. ^[34]
Goldman Sachs reiterated a Neutral stance and lowered its price target from $48 to $42 (a 12.5% reduction) in a note dated December 3. ^[35]
BTIG reduced its target to $52 on what it called “mixed earnings,” reflecting the tension between solid execution and a tempered outlook. ^[36]
Barclays is cited as having a $42 target—the current low end of the published range. ^[37]

These new targets cluster mostly in the low‑ to mid‑$40s, not far above today’s share price.

Broader consensus

Even after these cuts, data from Benzinga and StockAnalysis show: ^[38]

Overall analyst rating: generally “Buy”.
Consensus price target: around $55–$57, implying 30–45% upside from current levels, though this includes some older, higher targets that may drift lower as more firms update.
Average of the most recent targets (BTIG, Barclays, Goldman): about $45.33, which still suggests roughly 20% upside from the mid‑$37 area but with less margin for execution risk.

Pre‑earnings, firms like Rosenblatt (Buy, $58), DA Davidson (Neutral, $45), and Truist (downgrade to Hold, $44) had already begun resetting expectations in November and early December, signaling concern about a potential slowdown. ^[39]

Options, volatility and trading sentiment

GitLab has also become a playground for options traders around earnings:

On Tuesday (ahead of and immediately after the report), traders bought 27,374 call options on GTLB, about 72% more than the average daily call volume of 15,932, according to MarketBeat. ^[40]
MarketChameleon data show 30‑day implied volatility in the mid‑40s, with historical volatility near similar levels, underscoring the market’s expectation of larger‑than‑normal price swings. ^[41]

Heavy call activity can reflect speculation on a rebound, hedging by short sellers, or both. Either way, it signals that short‑term sentiment is polarized: some traders are betting the selloff is overdone, while others are bracing for more turbulence.

Strategic backdrop: AI‑native DevSecOps and recent security headlines

While today’s news flow is dominated by earnings, GitLab’s long‑term equity story is increasingly tied to AI and security.

AI‑native platform and product momentum

In May 2025, GitLab announced GitLab 18, describing it as an AI‑native evolution of its DevSecOps platform, weaving AI capabilities directly into core DevOps, security, and compliance workflows. ^[42]

By November 2025, the company had followed up with GitLab 18.5, adding new Duo Agents, smarter security triage, and a redesigned interface intended to make AI “an always‑on teammate” for developers. ^[43]

GitLab has also been:

Recognized as a Leader in the Gartner Magic Quadrant for DevOps Platforms and the 2025 Magic Quadrant for AI Code Assistants for its vision and execution. ^[44]
Expanding its Duo Agent Platform, launching an AI catalog for custom agents, and integrating with external AI systems like Claude‑based tools and Google Gemini, according to its Q3 investor update. ^[45]

These moves are central to the bullish thesis: if GitLab can successfully become the AI‑orchestrated control plane for software delivery, it could deepen its moat and justify premium valuations.

Security exposure story

On the security front, recent coverage from TechRadar highlighted that a researcher found more than 17,000 exposed secrets (API keys, passwords, tokens) in public GitLab Cloud repositories, alongside thousands more in Bitbucket and other sources. ^[46]

Importantly, this was not a breach of GitLab’s own infrastructure but a demonstration of how end‑users accidentally leak credentials in public repos. Still, it underscores the growing importance of built‑in secret scanning and security tooling, areas where GitLab is actively investing (for example, with features like Secret Validity Checks and enhanced SAST scanning noted in its Q3 release). ^[47]

New CFO and governance signals

GitLab also used the Q3 report to announce a key leadership change:

Jessica Ross, formerly CFO of Frontdoor and a veteran of Salesforce and Stitch Fix, will join GitLab as Chief Financial Officer effective January 15, 2026. ^[48]

Investors often view such hires as signals of maturity and discipline, particularly as GitLab balances growth investments with the need to sustain free cash flow and, eventually, GAAP profitability.

What today’s forecasts mean for GitLab stock

Putting all the December 3rd news and analysis together, the GitLab investment narrative can be boiled down to a handful of themes:

The bull case

Supportive elements highlighted in today’s reports include:

Durable growth: 25% revenue growth, strong RPO, and expanding large‑customer counts point to a business still gaining scale. ^[49]
Improving efficiency: Rising non‑GAAP margins and positive free cash flow suggest GitLab can grow without burning cash. ^[50]
AI leadership: Recognition as a leader in AI code assistants and aggressive rollout of AI‑native features give GitLab a credible claim as one of the key platforms in AI‑augmented software development. ^[51]
Valuation reset: After a drop to the mid‑$30s, GitLab trades close to its 52‑week low and well below prior highs, which some analysts see as an opportunity for long‑term investors willing to tolerate volatility. ^[52]

The bear (or cautious) case

At the same time, concerns raised across Street notes and media coverage include:

Guidance vs. expectations: The Q4 and full‑year revenue outlook, while raised, is still below earlier consensus, and growth is slower than the market hoped for an AI‑leveraged DevSecOps leader. ^[53]
Macro and segment pressure: Public sector and SMB softness could persist if macro conditions remain choppy, limiting upside surprise potential. ^[54]
Competitive intensity: From AI code assistants to end‑to‑end DevSecOps platforms, GitLab faces stiff competition, and the Street is watching closely to see if its AI investments drive share gains or simply defend existing business. ^[55]
Valuation risk: Even after the drop, GitLab is not “cheap” on standard earnings multiples, leaving less room for error if growth slows further. ^[56]

What to watch next

For investors following GitLab stock after the December 3 selloff, key upcoming catalysts include:

Execution vs. Q4 guidance: Any sign of outperformance (or underperformance) against the $251–$252 million Q4 revenue target will likely move the stock. ^[57]
Customer behavior in public sector and SMB: Updates on deal cycles, especially if the U.S. government funding environment stabilizes, could shift sentiment around GitLab’s growth trajectory. ^[58]
Adoption of AI features: Metrics or anecdotes around GitLab 18/18.5, Duo Agents, and AI‑driven upsells will help investors gauge whether AI is becoming a true growth accelerant. ^[59]
Integration of the new CFO: The Street will listen closely to Jessica Ross’s first earnings call in early 2026 for cues on capital allocation, margin targets, and long‑term financial philosophy. ^[60]

For now, December 3, 2025, marks a pivotal reset day for GitLab stock: the market is recalibrating what it is willing to pay for solid—but not spectacular—growth, even as the company leans hard into AI, security, and platform expansion.

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Investors should do their own research or consult a licensed financial advisor before making investment decisions.