UPDATE: Summit Insights Starts UiPath Inc. (PATH) at Sell, 'Too Much Hype And Competition'
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Summit Insights analyst Srini Nandury initiates coverage on UiPath Inc. (NYSE: PATH) with a Sell rating and a price target of $40.00.
The analyst comments "UiPath is a leader in RPA (Robotic Process Automation), a new category of software that aims to automate routine manual business tasks and save money for businesses. UiPath's market ascendence is impressive, and its investments in R&D and Sales are paying off. UiPath competes in a large but increasingly fragmented and commoditizing market. While UiPath vaulted to the top of the leader board with heavy investments in Sales and R&D headcount, we believe competition is intensifying for the company. While Automation Anywhere, Blue Prism, WorkFusion, etc., are considered the traditional competitors, we see the emergence of Microsoft as a more significant threat. SAP, Salesforce, IBM, and other players are building Automation into their platform offerings, simplifying many automation tasks. In addition, open-source RPA vendors will market with zero license cost offerings which will siphon many SMB and some large customers from pure-play proprietary RPA vendors. Our checks also indicate organizational pushbacks and governmental resistance in some European countries such as France, Italy, and Spain continue to slow the adoption of RPA in those geographies. In addition, many RPA implementations need the help of talented programmers who are in short supply. With failure rates for RPA projects hovering around 50%, and RPA solutions encountering difficulties to scale, we believe wider adoption would be challenging."
Shares of UiPath Inc. closed at $68.49 yesterday.
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