GitLab $GTLB ( ▼ 0.21% ) is slipping in early trading after an awkward combination of soft guidance and a late-night correction to its full-year numbers. The company topped expectations for Q3 revenue and earnings, but its Q4 forecast landed right around Wall Street’s estimates, which investors read as underwhelming.
Management also made things worse with a guidance misfire. In its initial release, GitLab said full-year adjusted earnings would be $0.95 to $0.96 per share. That math did not line up. With Q1 at $0.17, Q2 at $0.24, and Q3 at $0.25, the implied Q4 would have needed to be closer to $0.29 to $0.30. Hours later, GitLab issued a correction, saying the real full-year range is $0.88 to $0.89.
That mistake overshadowed what was already a tense report. Analysts flagged slowing net revenue retention and weaker customer additions as signs of execution issues. Bloomberg Intelligence noted that AI-driven headwinds may be weighing on seat growth and the monetization of GitLab’s AI features. Net retention slipped to 119 percent, missing estimates.
Wall Street was not in a forgiving mood this morning. Mizuho cut its price target to $47 from $52. KeyBanc lowered its target to $49 from $53. Goldman Sachs trimmed to $42 from $48. Wells Fargo cut to $45 from $50. Barclays and Truist also nudged their targets down.
GitLab beat Q3 expectations, but sentiment is firmly pointed in the opposite direction today.