UiPath Inc. (PATH) PT Lowered to $25 at Scotiabank
Scotiabank analyst Nick Altmann lowered the price target on UiPath Inc. (NYSE: PATH) to $25.00 (from $30.00) while maintaining a Sector Perform rating.
The analyst commented: " Shares have meaningfully pulled back since 4Q results (>20%), and with shares trading at a reasonable FCF multiple (~21x CY25), the bar is a bit lower heading into 1Q. However, we do see more limited upside to ARR and expect more in-line results (Cons at ~$47M NNARR; 5% Y/Y growth). We also see limited upside to FY25 ARR estimates (18% growth cc) and do not expect an upward revision to take place. PATH is increasingly leaning into larger deals with customers buying into the platform, which is a positive in our view, though we expect the low-end to remain challenged. We do believe large deal activity can help provide insulation to NRR (which has actually held in there quite nicely; 119% last qtr vs. 123% a yr prior) though guidance implies continued strength in gross retention and a rebound in new-customer ARR, which could prove to be challenging given the macro backdrop. We expect continued upside to margin estimates (cons only modeling ~100 bps OM expansion in FY25), though ARR growth will remain the main swing factor. Ultimately we believe shares can unlock once investors get more comfortable with GenAI’s implication on RPA and the broader automation space, which is still TBD in our view. PATH has 1k customers testing Autopilot capabilities and mgmt is placing a considerable focus on GenAI and released a host of new GenAI features at its AI Summit. We see 2H25 as more of a catalyst for shares once investors get a better sense of Autopilot monetization capabilities, but acknowledge there is likely minimal downside to current levels should estimates go largely unchanged in the NT."