GitLab's Flex Headwind Smaller Than Expected, H2 Pipeline Remains Healthy, UBS Securities Says

MT Newswires Live00:40

GitLab's (GTLB) Flex offering may create a smaller revenue headwind than expected, while its H2 pipeline remains healthy despite some early renewals in Q2, UBS Securities said in a note Sunday.

The investment firm estimated that Flex could reduce fiscal 2028 revenue growth by about 1 to 2 percentage points as adoption is likely to be "slower and more phased." Public-sector contracting limitations, large deals already in progress, and limited availability in some international markets could delay customer adoption, according to the note.

The near-term opportunity in artifact management appears more "modest" than previously anticipated, with GitLab now expecting a mix of new deployments and replacements rather than widespread displacement of JFrog (FROG), the firm said.

Competition from artificial intelligence-native source code management tools, including Cursor Origin, remains a concern, though early growth in non-developer seats could expand GitLab's addressable market over time, the firm said.

UBS Securities has a neutral rating on GitLab, with a price target of $50.

GitLab shares were up more than 4% in Monday trading.

Price: 48.96, Change: +1.97, Percent Change: +4.19

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