UiPath Analysts See It Improving Value By Its Platform Strategy

Analysts attended UiPath, Inc's PATH annual analyst day yesterday.
The clear focus was on driving a new platform product message and shifting its GTM approach to focus on expansions to capitalize more effectively upon this strategic platform strategy, Needham analyst Scott Berg noted.
Berg reiterated a Buy and $20 price target.
He believes the new platform view will resonate well with larger customers attempting to automate more of their respective enterprises systematically.
He also believes investor focus will be on initial FY24 guidance calling for revenue growth of ~18% (below current consensus for 23%) yet a more profitable model.
The most significant delta on the revenue expectations appears driven by a lack of Street visibility into a deal mix between SaaS and term license. The guidance suggests more than expected SaaS deals, which translates to less upfront revenue recognized.
Credit Suisse analyst Phil Winslow cut the price target on UiPath to $30 from $37.50 and kept an Outperform.
He notes that Rob Enslin, Co-CEO, and Chris Webber (CBO) both delivered notable updates regarding UiPath's go-to-market strategy, specifically regarding customer segmentation.
UiPath CFO Ashim Gupta reaffirmed previous guidance for UiPath's long-term margin profile and provided 2024 revenue and ARR targets. The forecast includes SaaS headwind to revenue and FX headwind to both ARR and revenue, and are below current consensus estimates for revenue and ARR.
Additionally, Gupta guided to 200bp of operating margin headwind in 2024 versus 2023 from amortization of commissions likely to continue through 2026, with tax rates of 30%, Winslow notes.
RBC Capital analyst Matthew Hedberg maintained UiPath with a Sector Perform and cut the price target from $18 to $16.
The main takeaway was that, following a challenging year and reduced FY24 estimates, management continues to believe they are well-positioned LT for enterprise automation.
The first look at FY24 was provided, slightly below consensus, and led to his reduced estimates, though it was framed as an "anchor point" for the year.
Price Action: PATH shares traded lower by 5.84% at $12.65 on the last check Wednesday.

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