Canaccord Genuity raises UiPath stock price target to $16

Monday, Canaccord Genuity analysts raised the price target for UiPath Inc. (NYSE: NYSE:PATH) stock to $16 from $14, while maintaining a Buy rating. The adjustment reflects the firm’s optimism about UiPath’s potential for growth and improving financial performance. According to InvestingPro data, UiPath currently trades at $13.31, with 11 analysts recently revising their earnings estimates upward. The company maintains impressive gross profit margins of 83% and holds more cash than debt on its balance sheet.

The analysts noted that UiPath has begun to recover from its 52-week low of $9.38 in April, showing a strong 7.6% return just in the past week. Despite this rebound, the company’s current enterprise value to revenue multiple remains significantly below its two-year average, unlike broader software indices that have surpassed their averages. The analysts expressed confidence in UiPath’s ability to enhance its net revenue retention (NRR) and achieve a more balanced financial profile over the coming years. InvestingPro analysis reveals the company maintains a healthy current ratio of 2.95, with liquid assets well exceeding short-term obligations.

UiPath’s potential to improve its margins and achieve consistent growth could lead to a more favorable stock valuation. The analysts anticipate that steady execution over several quarters could unlock a more reasonable stock multiple. They reiterated their Buy rating, citing an increased price target based on projected sales and free cash flow for the calendar year 2026.

The analysts also highlighted an increase in their revenue estimates for UiPath by $30 million for the fiscal year 2027. This revision is driven by growing confidence in the company’s ability to achieve double-digit growth next year, despite challenges in the macroeconomic environment. UiPath’s unique strengths in the market are seen as a positive factor in this context.

Overall, the sentiment on UiPath stock remains low, with limited expectations for success against newer competitors like OpenAI and Anthropic. However, Canaccord Genuity’s updated price target and revenue projections suggest a cautiously optimistic outlook for the company’s future performance. InvestingPro subscribers have access to 12 additional exclusive insights about UiPath, including detailed financial health metrics and comprehensive valuation analysis in the Pro Research Report, helping investors make more informed decisions in this competitive landscape.

In other recent news, UiPath Inc. reported a first-quarter Annual Recurring Revenue (ARR) of $1.693 billion, reflecting a 12% year-over-year growth, which slightly exceeded analysts’ projections. The company also noted a 6% increase in revenue compared to the previous year, with operating margins reaching 20%, surpassing consensus expectations. Analysts from TD Cowen, RBC Capital, and Mizuho (NYSE:MFG) Securities have adjusted their price targets for UiPath, raising them to $15, $15, and $14, respectively, indicating a more optimistic view of the company’s financial trajectory. Despite these positive developments, analysts maintain a cautious stance, with BofA Securities and Mizuho retaining Underperform and Neutral ratings, respectively, citing uncertainties in the macroeconomic environment and the company’s long-term structural considerations.

UiPath’s recent performance has been bolstered by its successful cloud offerings and a significant contract with the U.S. Air Force, contributing to its improved market outlook. Additionally, the company has updated its full-year guidance, reflecting a more optimistic forecast than previously anticipated. Analysts acknowledge UiPath’s improved execution and the positive trajectory in its business, particularly with larger enterprise customers. However, they caution that the opportunity for automation remains in the early stages, and broader economic factors could impact future performance. Despite these uncertainties, the raised price targets suggest a recognition of UiPath’s ability to navigate challenges and adapt to market demands.

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