UiPath Upgraded By JP Morgan On Hope Of Stable ARR Growth; Several Other Analysts Bump Up Forecasts

Several analysts raised the price target of UiPath, Inc. PATH after the company reported strong fourth-quarter FY24 results yesterday.

The company reported quarterly earnings of 22 cents per share, which beat the analyst consensus estimate of 16 cents by 37.5%.

Quarterly sales clocked in at $405.253 million, beating the analyst consensus estimate of $383.826 million and representing a 31.34% increase over sales of $308.549 million from last year.

UiPath sees first-quarter revenue in a range of $330 million to $335 million, versus the $347.851 million estimate and fiscal year 2025 revenue in a range of $1.555 billion to $1.56 billion, vs. the $1.531 billion estimate.

Needham analyst Scott Berg raised the price target to $30 (from $25) at a Buy rating.

The analyst says UiPath’s partnerships with top IT firms continue to take hold and drive deal flow improvements. 

Also, the company’s burgeoning Federal Government opportunity aided a contract for up to $95 million over five years, which is the tip of a much larger opportunity and Cloud, writes the analyst. 

The analyst says the company achieved GAAP profitability for the first time, which they “believe could be achieved on an annual go forward basis starting in the back half of FY25.”

Berg sees FY25 revenue and EPS of $1.564 billion and $0.56, respectively.

RBC Capital Markets analyst Matthew Hedberg increased the price target to $29 from $27 at Sector Perform rating.

The analyst says the results were strong as the efficiencies and ROI around AI and automation increasingly appear to be resonating with customers. 

Hedberg writes that the initial FY25 guidance was slightly ahead, and should provide an opportunity for estimates to build through the year. 

The analyst estimates revenue and adjusted EPS of $1.558 billion and $0.50 for FY25.

JP Morgan analyst Mark R Murphy boosted the rating to Overweight (from Neutral) and raised the price target to $28 from $22.

The analyst expects the decelerating ARR growth to transition into a stabilized growth trend while attachment to GenAI automation projects ramp up amid ongoing margin improvement. 

In particular, the analyst expects another 100bps expansion as the starting point for guidance in FY25, with a 23% PF FCF margin, which is also a solid starting point for the FY25 framework. 

The analyst says the business is reasonably balanced, and full-year GAAP profitability isn’t too far off. Murphy estimates adjusted EPS of $0.60 in FY25 and $0.65 in FY26.

Price Action: PATH shares are down 7.31% at $22.65 on the last check Thursday.