BMO Capital lowers UiPath stock price target to $12.50 on ARR concerns

Investing.com - BMO Capital has lowered its price target on UiPath Inc. (NYSE:PATH) to $12.50 from $15.50 while maintaining a Market Perform rating on the stock. According to InvestingPro data, the stock appears undervalued, with analyst targets ranging from $11.71 to $17.00, while the company maintains impressive gross profit margins of 83%.

The firm’s decision follows UiPath’s report of $30 million in net new Annual Recurring Revenue (ARR), which exceeded BMO’s estimate of $25 million but still represented a 30% year-over-year decline.

BMO Capital projects that UiPath’s net new ARR will increase modestly in Q4 fiscal year 2026 based on the company’s guidance, but forecasts a decline in fiscal year 2027 net new ARR due to uncertainty in both the Robotic Process Automation (RPA) and automation segments.

The research firm acknowledged that UiPath reported having over 450 customers deploying agentic capabilities, but believes it is too early to incorporate automation into its long-term forecast.

BMO Capital cited competitive market conditions in the automation sector as an additional factor in its decision to maintain a Market Perform rating while reducing the price target.

In other recent news, UiPath Inc. reported impressive financial results for the second quarter of 2025, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $0.15, significantly higher than the projected $0.09, resulting in a 66.67% surprise. Additionally, UiPath’s revenue reached $362 million, exceeding the anticipated $347.35 million. These results reflect strong performance and positive investor sentiment. Furthermore, DA Davidson maintained its Neutral rating on UiPath while lowering the price target to $12.00 from $14.00. This decision follows UiPath’s strong second-quarter fiscal 2026 results, which included a notable annual recurring revenue beat and better-than-expected guidance. The firm’s analyst, Lucky Schreiner, has assumed coverage of the company. These developments highlight UiPath’s recent financial achievements and the ongoing evaluations by analysts.

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