Index falls as earnings results weigh; pound above $1.33, Bodycote soars
On Friday, BMO Capital Markets revised its price target for UiPath Inc. (NYSE:PATH) shares, reducing it to $11.50 from the previous $16.00, while keeping a Market Perform rating on the stock. The adjustment comes after UiPath reported a quarter that fell short of expectations, with both Annual Recurring Revenue (ARR) and revenue figures missing estimates. According to InvestingPro data, the stock has declined by 19% in the past week, though the company maintains impressive gross profit margins of 83% and healthy liquidity with a current ratio of 2.93. Additionally, the company’s forward-looking guidance for fiscal year 2026 was seen as underwhelming and heavily reliant on performance in the latter part of the period.
BMO Capital’s analyst expressed concerns over UiPath’s sustainable growth prospects, citing factors such as the increasing presence of agentic solutions, a competitive market landscape, and broader macroeconomic challenges. The public sector, which represents UiPath’s third-largest vertical, poses particular risks in the current environment, contributing to the analyst’s apprehension.
As a result of these factors, BMO Capital has revised its ARR and revenue projections for UiPath downward for FY26. The firm’s decision to maintain the Market Perform rating indicates a neutral outlook on the stock, suggesting that the analyst does not see significant upside or downside from the current market price.
The reduction in the price target reflects BMO Capital’s updated assessment of UiPath’s valuation in light of the company’s recent performance and market conditions. UiPath, a leading player in the robotic process automation industry, has been navigating a complex and rapidly evolving competitive landscape.
Investors and market watchers will be closely monitoring UiPath’s performance in the coming quarters to see if the company can address the concerns raised and meet its revised projections for fiscal year 2026.
In other recent news, UiPath Inc. has faced multiple adjustments to its stock price targets following the release of its fourth-quarter financial results. TD Cowen reduced its price target for UiPath to $12, citing lighter than expected Annual Recurring Revenue (ARR) and revenue, while maintaining a Hold rating. RBC Capital Markets also lowered its price target to $13, noting a pause in federal spending and uncertainty affecting the company’s outlook. Meanwhile, Truist Securities adjusted its target to $12, maintaining a Buy rating but highlighting macroeconomic volatility and public sector hesitancy as factors influencing the mixed results.
DA Davidson reduced its price target to $11, expressing concerns about uncertainties introduced by U.S. Federal customers that could impact private sector spending. Despite these challenges, the firm maintained a Neutral rating on the stock. KeyBanc Capital Markets maintained a Sector Weight rating after UiPath reported a 9.2% year-over-year growth in ARR, which fell short of expectations. The company attributed this shortfall to geopolitical challenges affecting its U.S. federal business, which has led to increased uncertainty in deal closures.
Analysts are closely monitoring UiPath’s potential in artificial intelligence and agentive technology opportunities, which are not yet factored into investor expectations. The company is also undergoing a go-to-market reorganization, showing early positive traction. These developments are crucial as UiPath works towards achieving its growth objectives amid ongoing market volatility and geopolitical challenges.
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