UBS maintains Neutral on GitLab stock citing demand stability

UBS has maintained a Neutral rating on GitLab Inc (GTLB) stock, with a price target of $40.00, as the company's stock is currently trading at $42.08, slightly below its InvestingPro Fair Value of $42.77. UBS's assessment is based on stable demand outlook, with both partners meeting or slightly exceeding their second-quarter practice growth targets, despite a recent reduction in force.

The adoption of GitLab's Duo AI Product remains modest, with only 15-25% of the GitLab user base utilizing the feature. UBS expects a 20% total revenue growth in the second quarter, but cautions that market expectations may have risen to 21-22% revenue growth, representing $21-24 million in sequential revenue gains. The firm prefers to remain on the sidelines ahead of the earnings report, noting the stock's surge of more than 59% over the past six months from its 52-week low.

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