Gitlab's (GTLB) raised fiscal 2027 guidance factors in short-term pressure along with the potential disruption risk from the recent 14% reduction in workforce, RBC Capital Markets said in a Wednesday note.

Gitlab late Tuesday said that it now expects fiscal 2027 adjusted diluted earnings of $0.79 to $0.82 per share on revenue of $1.11 billion to $1.12 billion, up from its previous guidance of $0.76 to $0.80 per share on revenue of $1.10 billion to $1.12 billion. RBC expects $0.81 and $1.12 billion.

Noting the company's better-than-expected quarterly results, RBC said that the Q1 saw a 30% new logo growth with the highest absolute first order count in 10 quarters. However, price-sensitive customers remained under pressure in Q1, with a higher seat contraction than anticipated along with additional M&A-related contraction.

RBC raised its price target to $29 from $25 and maintained its sector perform rating.

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