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On Thursday, Mizuho (NYSE:MFG) Securities adjusted its outlook on UiPath Inc. (NYSE:PATH) by lowering the price target to $12.00 from the previous $14.00, while maintaining a Neutral rating on the company’s shares. According to InvestingPro data, UiPath maintains impressive gross profit margins of 83.38% and holds more cash than debt on its balance sheet, suggesting fundamental strength despite recent market challenges. The revision follows the company’s fourth fiscal quarter revenue report, which fell slightly short of consensus expectations by $1 million, contrasting with the $7 million beat in the third fiscal quarter. UiPath management cited a $2 million foreign exchange headwind and challenges in the public sector due to changes with the new administration as contributing factors to the revenue miss.
UiPath’s guidance for fiscal year 2026 forecasts a year-over-year growth of 6.8%, which is below the consensus estimate of 11%. This projection is seen as an indicator of the broader macroeconomic uncertainty that is currently affecting the timing of deal closures in the market. While the stock has faced headwinds, InvestingPro analysis suggests UiPath is currently undervalued, with analysts setting price targets ranging from $13 to $19. Mizuho’s analyst pointed out that while UiPath is making strategic moves, including a strong push towards artificial intelligence and the acquisition of Peak, the long-term demand for robotic process automation (RPA) remains a concern for investors given the potential for disruption in the sector.
The analyst’s commentary reflects these concerns, noting that despite UiPath’s positive direction, the current macroeconomic uncertainty presents challenges for the company in accelerating its growth profile. The new price target of $12 implies a 3.3x next twelve months (NTM) enterprise value to revenue (EV/Rev) and 14x NTM enterprise value to free cash flow (EV/FCF) multiples.
UiPath, known for its RPA software that helps automate repetitive tasks, has been focusing on expanding its capabilities through artificial intelligence and strategic acquisitions. The company’s recent performance and forward-looking guidance are closely watched by investors as indicators of its ability to navigate a shifting technological landscape and uncertain economic conditions. For deeper insights into UiPath’s financial health and growth prospects, InvestingPro subscribers can access the comprehensive Pro Research Report, which includes detailed analysis of the company’s competitive position and growth metrics among 1,400+ top stocks.
In other recent news, UiPath Inc. reported its fourth-quarter earnings for fiscal year 2025, showcasing an earnings per share (EPS) of $0.26, which exceeded the anticipated $0.20. Despite this earnings beat, revenue for the quarter was slightly below expectations, coming in at $424 million compared to the forecasted $425.27 million. The company achieved a 5% year-over-year revenue growth for the quarter, with annual revenue reaching $1.43 billion, marking a 9% increase from the previous year. Notably, the Annual Recurring Revenue (ARR) grew by 14% to $1.666 billion. UiPath also launched new AI products and completed a strategic acquisition, indicating continued investment in innovation. The company’s outlook for fiscal year 2026 suggests slower growth in the first half due to macroeconomic factors, with a projected revenue range of $1.525 billion to $1.530 billion. Additionally, the firm maintains a strong cash position with $1.7 billion in cash and equivalents, and it returned $390 million to shareholders through share repurchases in fiscal year 2025. Analyst firms have not provided any recent upgrades or downgrades for UiPath, but the company’s strategic focus on AI and automation continues to be a point of interest.
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