Gitlab (GTLB) is likely seeing a slight improvement quarter on quarter but given the shares' recent run, the setup for the company looks tough as expectations are also moving higher, UBS Securities said in a note emailed Friday after GitLab partner checks.

UBS said that overall the partner checks indicated a "stable demand outlook" for the company, with the partners "landing in-line/slightly ahead of their Q2 practice growth targets."

The investment firm also said it "picked up stable seat growth" and "minimal disruption" from the recent layoffs.

UBS said that after the partners' feedback it believes a "similar beat to Q1" is possible, which would mean about 20% total revenue growth in Q2.

However, since the company's share price is more than double off its April lows, expectations may now be above this level to about 21% to about 22% revenue growth, the note said, adding these expectations are "aggressive and we therefore prefer to remain on the sidelines into the print."

UBS has a neutral rating on Gitlab and raised the company's price target to $40 from $35.

Price: 41.67, Change: -0.41, Percent Change: -0.97