Is Gitlab, Inc. overvalued or undervalued?

As of 10 June 2025, the valuation grade for Gitlab, Inc. has moved from risky to expensive, indicating a significant shift in perception regarding its valuation. The company appears to be overvalued, particularly when considering its P/E ratio of 2069, which far exceeds the industry average, and an EV to EBITDA ratio of -58.98, suggesting negative earnings performance relative to enterprise value. Additionally, the PEG ratio stands at 20.55, further highlighting the disconnect between growth expectations and current pricing.
In comparison to its peers, Gitlab's P/E ratio is notably higher than Duolingo, Inc. at 221.64 and Informatica, Inc. at 1606.07, both of which are also positioned as expensive or attractive, respectively. This stark contrast raises concerns about Gitlab's sustainability at its current valuation levels. Furthermore, Gitlab's recent stock performance has lagged significantly behind the S&P 500, with a year-to-date return of -27.76% compared to the index's 2.44%, reinforcing the notion that the stock may not justify its high valuation amidst broader market trends.