What’s Happening With GitLab Stock?

October 17th, 2025 by Trefis Team
GTLB: GitLab logo
GTLB
GitLab

GitLab (NASDAQ: GTLB), a company that provides tools to help teams manage their software development lifecycle, saw its stock surge 10.6% yesterday following reports that Datadog is considering a takeover bid at $60 per share. However, setting aside this acquisition buzz, we find GTLB stock currently unattractive at its price of around $48, primarily due to its high valuation relative to its fundamentals.

Our conclusion is based on an analysis of GTLB’s current and historical operating performance and financial health. Specifically, our assessment across key parameters—including Growth, Profitability, Financial Stability, and Downturn Resilience—indicates that the company possesses a Moderate overall operating and financial condition.

That being said, if you seek an upside with less volatility than holding an individual stock like GTLB, consider the High Quality Portfolio. It has comfortably outperformed its benchmark—a combination of the S&P 500, Russell, and S&P MidCap indexes—and has achieved returns exceeding 105% since its inception. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

How Does GitLab’s Valuation Look vs. The S&P 500?

Going by what you pay per dollar of sales or profit, GTLB stock looks very expensive compared to the broader market.

  • GitLab has a price-to-sales (P/S) ratio of 9.1 vs. a figure of 3.2 for the S&P 500
  • Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 217.4 compared to 20.7 for S&P 500

How Have GitLab’s Revenues Grown Over Recent Years?

GitLab’s Revenues have grown considerably over recent years.

  • GitLab has seen its top line grow at an average rate of 37.4% over the last 3 years (vs. increase of 5.4% for S&P 500)
  • Its revenues have grown 29.0% from $665 Mil to $858 Mil in the last 12 months (vs. growth of 5.2% for S&P 500)
  • Also, its quarterly revenues grew 29.2% to $236 Mil in the most recent quarter from $183 Mil a year ago (vs. 6.1% improvement for S&P 500)

How Profitable Is GitLab?

GitLab’s profit margins are considerably worse than most companies in the Trefis coverage universe.

  • GitLab’s Operating Income over the last four quarters was $-101 Mil, which represents a very poor Operating Margin of -11.8% (vs. 18.6% for S&P 500)
  • GitLab’s Operating Cash Flow (OCF) over this period was $42 Mil, pointing to a very poor OCF Margin of 4.9% (vs. 20.3% for S&P 500)
  • For the last four-quarter period, GitLab’s Net Income was $-9.7 Mil – indicating a very poor Net Income Margin of -1.1% (vs. 12.7% for S&P 500)

Does GitLab Look Financially Stable?

GitLab’s balance sheet looks very strong.

  • GitLab’s Debt figure was $0.0 at the end of the most recent quarter, while its market capitalization is $8.0 Bil (as of 10/16/2025). This implies a very strong Debt-to-Equity Ratio of 0.0% (vs. 21.7% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
  • Cash (including cash equivalents) makes up $1.2 Bil of the $1.5 Bil in Total Assets for GitLab.  This yields a very strong Cash-to-Assets Ratio of 77.8% (vs. 7.0% for S&P 500)

How Resilient Is GTLB Stock During A Downturn?

GTLB stock has fared much worse than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on GTLB stock? Our dashboard Now Is Not The Time To Buy Gitlab Stock has a detailed analysis of how the stock performed during and after previous market crashes.

Inflation Shock (2022)

  • GTLB stock fell 79.5% from a high of $130.88 on 8 November 2021 to $26.77 on 4 May 2023, vs. a peak-to-trough decline of 25.4% for the S&P 500
  • The stock is yet to recover to its pre-Crisis high
  • The highest the stock has reached since then is 77.60 on 11 February 2024 and currently trades at around $48

Putting All The Pieces Together: What It Means For GTLB Stock

In summary, GitLab’s performance across the parameters detailed above are as follows:

• Growth: Very Strong
• Profitability: Very Weak
• Financial Stability: Very Strong
• Downturn Resilience: Very Weak
• Overall: Moderate

But keeping in mind its high valuation, we think that the stock is unattractive, which supports our conclusion that GTLB is a bad stock to buy at the current levels. Now, of course, we could be wrong in our assessment and if there’s really an offer from Datadog at a premium to the current levels, the stock will likely trend higher. That said, investors should weigh in all the risks, given that the stock doesn’t look appealing from a fundamental perspective.

While you would do well to avoid GTLB stock for now, you could explore the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid-, and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.

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