Truist cuts UiPath stock price target to $12 from $14

On Thursday, Truist Securities adjusted its price target for UiPath Inc. (NYSE:PATH) shares, reducing it to $12.00 from the previous $14.00, while maintaining a Buy rating on the stock. The stock currently trades at $10.06, with analyst targets ranging from $11 to $18. According to InvestingPro analysis, UiPath appears undervalued based on its Fair Value calculation, suggesting potential upside opportunity. The adjustment follows UiPath’s fourth-quarter results, which were described as mixed by the analysts at Truist. The results were notably affected by increased macroeconomic volatility and a shift in government-related public sector hesitancy.

The report from Truist Securities highlighted that due to these factors, their topline estimates for UiPath have been lowered. Despite the mixed results, the analysts noted that there are positive aspects to UiPath’s current position. The company has shown early traction with its artificial intelligence products, including agentic offerings. With impressive gross profit margins of 83.4% and revenue growth of 16.5% in the last twelve months, UiPath maintains strong fundamentals. InvestingPro subscribers can access 8 additional key insights about UiPath’s AI initiatives and financial health in the comprehensive Pro Research Report. Moreover, UiPath’s go-to-market (GTM) reorganization efforts are largely complete and are beginning to show positive traction.

Terry Tillman, the analyst from Truist Securities, provided a statement on the company’s status and outlook. "Post 4Q, the story remains a work in progress in terms of improving annualized renewal runrate (ARR) and returning net new ARR to a position of solid growth, in our opinion," Tillman said. The analyst also pointed out that while there is optimism about the early success of UiPath’s AI products and GTM reorganization, the firm is holding a cautious stance, waiting for a growth inflection before becoming more constructive on the stock.

The revised price target to $12 from $14 reflects Truist Securities’ updated topline estimates for UiPath. The firm’s analysts are monitoring the company’s progress, particularly in terms of ARR improvement and the momentum of net new ARR, to assess future growth potential.

In summary, UiPath’s fourth-quarter performance has led to a recalibration of expectations from Truist Securities, with the price target being adjusted in light of the current macroeconomic challenges and public sector hesitancy that have impacted the company’s topline estimates. Nonetheless, Truist Securities continues to see potential in UiPath’s AI product offerings and GTM strategies, maintaining a Buy rating while observing the company’s progress for signs of a growth inflection. The company maintains a strong financial position with more cash than debt and a healthy current ratio of 3.13, indicating solid liquidity. InvestingPro’s Financial Health Score rates PATH as "GOOD," supporting the potential for future growth.

In other recent news, UiPath Inc. reported fourth-quarter results that have raised concerns among analysts, leading to adjustments in price targets and ratings. DA Davidson reduced its price target for UiPath from $15.00 to $11.00, maintaining a Neutral rating due to uncertainties related to U.S. Federal customers and a conservative outlook for fiscal year 2026. KeyBanc Capital Markets maintained a Sector Weight rating, noting the company’s lower-than-expected financial results and highlighting geopolitical challenges impacting the U.S. federal business. Scotiabank (TSX:BNS) also adjusted its price target from $15.00 to $12.00, citing a shortfall in the company’s ARR guidance and macroeconomic uncertainties affecting revenue growth.

Evercore ISI lowered its price target to $12.00 from $16.00, pointing to mixed financial results and challenges in the public sector, while maintaining an In Line rating. The company’s ARR grew by 14% to $1,666 million, slightly below expectations, and revenue increased by 5% to $424 million. Despite a positive operating margin surprise, UiPath’s management has adopted a cautious stance for fiscal year 2026 due to postponed deal closures and economic uncertainty. Needham maintained a Hold rating, highlighting underperformance related to delayed deals in the U.S. Federal segment and noting a rise in cloud adoption.

UiPath’s performance in the cloud sector and its Agentic innovations have shown promise, with cloud ARR climbing over 50% year-over-year. Analysts from multiple firms have expressed cautious optimism about UiPath’s potential in artificial intelligence, although concerns remain about the company’s ability to navigate current challenges. The overall sentiment reflects a period of uncertainty for UiPath, with analysts awaiting clearer visibility on the company’s strategic direction and future growth prospects.

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