Why This UiPath Analyst Believes Stock Is Still Attractive After 100% Gain In 2023

Shares of UiPath Inc PATH ended 2023 with gains of more than 100%.

The company is a leader in the workflow automation and process optimization markets and is poised to receive a boost from investments in artificial intelligence (AI), according to William Blair.

The UiPath Analyst: Jake Roberge initiated coverage of the stock with an Outperform rating.

The UiPath Thesis: The company’s platform has a strong retention rate of 97%, which indicates that it is becoming “mission critical for its customers,” Roberge said in the initiation note.

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“UiPath is also expanding into new opportunities, such as generative AI, API integration, and application testing,” the analyst wrote.

“While UiPath is already at a large scale with over $1.3 billion in annual recurring revenue (ARR) and nearly 11,000 customers, we believe its total addressable market (TAM) is significant - UiPath pegs it at $61 billion,” he added.

While UiPath’s latest guidance for fiscal 2024 calls for operating margins of 16%, with most go-to-market restructuring complete, “we believe the company could see nice efficiency gains over the next few years,” Roberge further stated.

PATH Price Action: Shares of UiPath were down 3.8% to $23.87 at the time of publication Tuesday.

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