UiPath (PATH) Stock falls over 80%


UiPath Inc.’s investor-day presentation disappointed Wall Street, sending stocks down more than 5% in Wednesday trade. Since its initial public offering in April, PATH stock (NYSE:PATH) has dropped over 80%.

Analysts commenting on Wednesday’s previous day’s event expressed concern about UiPath’s (PATH) sales reorganization.

Market Analysis of PATH Stock

Mizuho analyst Siti Panigrahi, who reduced PATH stock (NYSE:PATH) rating to neutral with a price target of $14 in early September, said that the sales restructuring would impact the ARR prediction.

“While we are optimistic about UiPath’s transition to a platform business (which expands the [total addressable market] from $61 billion to $93 billion) and the company’s refined go-to-market motion (which should drive increased traction among enterprise customers), financial guidance for FY24 is weaker than expected and reflects the challenges due to restructuring and a change in [go-to-market strategy] during an uncertain macro environment, while balancing growth and profitability,” P said.

PATH stock (NYSE:PATH) fell as high as 7.3% to an intraday low of $12.46, or 78% below its IPO price of $56 a share in April 2021, and concluded down 3.7% at $12.94. Shares have plunged 70% by 2022, while the S&P 500 index has dropped 22%, and the tech-heavy Nasdaq Composite Index has dropped 29%.

Chief Financial Officer of UiPath, Ashim Gupta, informed analysts during the Tuesday event that while up to 25% year-over-year revenue growth was possible, An anchor projection of 18% growth, or around $1.19 billion in sales, is produced by factoring in anticipated headwinds from software as a service of about 500 basis points and foreign exchange headwinds of about 200 basis points.

According to FactSet statistics, by mid-Wednesday, the Wall Street consensus for revenue had dropped to $1.22 billion, down from $1.24 billion on Monday. In comparison, analysts’ average ARR projection had dropped to $1.41 billion, down from $1.43 billion.

According to JPMorgan analyst Mark Murphy, who has a neutral rating and a price target of $18, investors are concerned about the lower-than-expected ARR prediction as well as the “choppy macroeconomic situation.”

This year, choppiness — or “chopping-ness” — has become the standard for UiPath. Earlier in September, the business reduced its annual sales prediction to between $1 billion and $1.01 billion, with ARR of $1.15 billion to $1.16 billion, down from its earlier expectation of revenue of around $1.09 billion and ARR of $1.22 billion to $1.23 billion.

Eleven of the 22 analysts that cover PATH stock (NYSE:PATH) have a buy rating, ten have a hold recommendation, and one has a sell rating. According to FactSet data, eight analysts reduced their price targets, resulting in an average target price of $18.23, down from a prior $27.98 at the end of August.

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About the author: Okoro Chinedu is a freelance writer specializing in health and finance, with a keen interest in cryptocurrency and blockchain technology. He has worked in content creation and digital journalism. Since 2019, he has written on various online platforms, and his work has been recognized by several important media sources and specialists in finance and crypto. In addition to writing, Chinedu enjoys reading, playing football, posing as a medical student, and traveling.