GitLab Eyes Catch-Up Rally; Cognyte Builds Confidence With $40 Million In Contracts

With this week comes the official close of first-quarter earnings season in Needham analyst Mike Cikos‘ coverage, in which Cognyte Software CGNT and GitLab Inc GTLB are the final two companies reporting.

Cikos maintained Buy on GitLab with a price target of $85 and noted shares are due for a rebound given his expectation for sustained execution. He had a Hold rating on Cognyte.

The analyst noted both companies are likely to report upside, resulting in outsized positive share-price performance.

Cognyte: Cikos noted the number and size of large, multi-million dollar contracts signed in recent months place Cognyte in a strong position to execute against fiscal 2026 revenue guidance of ~$392 million.

Also Read: GitLab’s AI Pricing Changes, CRO Strategy Make JPMorgan Analyst Cautious Despite Expected Q1 Beat

The analyst noted revenue visibility from Cognyte’s cRPO balance exiting fiscal 2025 was ~86% (lower than 89% in fiscal 2025 and 94% in fiscal 2024).

However, Cognyte has announced over $40 million in total contract value in the interim, Cikos said.

Given management’s strong execution in recent quarters on both top-line performance, compounded by gross margin expansion and operating expenditure discipline, the analyst noted Cognyte can continue to grind higher.

Cikos projected fiscal first-quarter revenue and adjusted EPS estimates of $94.2 million and $0.02 versus consensus of $94 million and $0.01.

GitLab: From Cikos’ seat, GitLab can report sustained Revenue outperformance alongside improving operating margins and is due for a ‘catch-up trade’ in light of recent underperformance compared to his broader Data Infrastructure coverage.

The most common question the analyst received from investors is ‘Why has GitLab’s share-price performance lagged other Data Infrastructure vendors?’

Cikos noted the crop of bear arguments remains largely unchanged — focused on how investors build confidence in GitLab’s competitive moat over a multi-year time horizon versus GitHub, concerns regarding Seat growth, particularly for the Premium SKU and what should investors underwrite as durable long-term growth once the Premium price increase’s tailwind fades.

Additionally, investor attention turned to the May 2025 announcement of the launch of GitLab 18 where Premium SKU customers can purchase Duo Enterprise without upgrading to the Ultimate SKU, the analyst said. Clients have asked if these changes to packaging imply a lack of success in up-tiering to Ultimate, he said.

Cikos noted this is patently false, given commentary from management in recent quarters demonstrating success in driving First Orders with Ultimate and Ultimate’s participation in large customer expansions. However, the analyst is sympathetic to investors’ debate regarding durability and pricing for AI-native capabilities across the DevSecOps ecosystem, given the velocity of technological and competitive improvements.

Cikos projected fiscal first-quarter revenue and adjusted EPS estimates of $212.6 million and 14 cents versus consensus of $213.0 million and 15 cents.

CGNT, GTLB Price Actions: Cognyte stock is up 0.53% at $11.28; GitLab is up 1.62% at $49.56 at publication on Monday.

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