UiPath Falls 20% After Cutting Guidance, and Mizuho Reduces After “Strategic Repositioning.”


ARR exceeds $1 billion, achieving $1.043 billion, up 44% over the previous year thanks to a net new ARR of $66 million.


Shares of robotic process automation software provider UiPath (NYSE:PATH) fell on Wednesday after it decreased its fiscal 2023 outlook, leading research bank Mizuho to downgrade the stock and cite the company’s “strategic repositioning.”


Siti Panigrahi, an analyst with the firm, downgraded UiPath (NYSE:PATH) from buy to neutral and dropped the price objective from $40 to $14, adding that the company’s yearly recurring revenue will likely be under pressure given the current state of unpredictability.

Although the go-to-market repositioning to enterprise/C-Suite is encouraging, Panigrahi stated in a note to clients that “we believe the reorganization’s focus on delivering profitability, plus likely macro deterioration and enterprise-oriented product alignment, may pressure ARR growth.”

The stock of UiPath (NYSE:PATH), according to Panigrahi, is “de-risked” for the second half of the year, but unless it makes success with the repositioning, it’s likely that shares will remain “range-bound.” Shares of UiPath (NYSE:PATH) dropped more than 21% in premarket trading to $12.31.

Wall Street analysts had projected the company’s sales to total $269.5M for the third quarter, but New York City-based UiPath (NYSE:PATH) said it now anticipates third-quarter revenue to be between $243M and $245M. In addition, the company anticipates fiscal-year sales of between $1.002 billion and $1.007 billion, compared to analysts’ original projection of $1.09 billion.

Hedge fund Coatue Management said last month that, in addition to making many other adjustments to its portfolio, it had initiated a new investment in UiPath (NYSE:PATH) during the second quarter.

UiPath analysts are mostly divided (NYSE:PATH). While Wall Street analysts gave it a BUY rating, Seeking Alpha authors gave it an average HOLD rating. Seeking Alpha’s quant algorithm, which routinely outperforms the market, rates PATH as a HOLD.

Q2 Performance

The Q2 financial results show revenues of $242.2 million, an increase of 24% year over year. a GAAP gross margin of 82% and an ARR of $1.043 billion.

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