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Investing.com - UiPath Inc. (NYSE:PATH), a $5.8 billion automation software company with impressive gross profit margins of 83%, maintained its position after Needham analyst Scott Berg reiterated a Hold rating on the stock, citing early signs of business stabilization. According to InvestingPro analysis, the company maintains strong financial health with a current ratio of 2.75.
The automation software company reported what Needham described as "solid" second-quarter results against what it called "conservative guidance." A key metric, net revenue retention (NRR), remained flat quarter-over-quarter at 108%, following what the analyst characterized as a precipitous decline over the previous two years. The company achieved profitability in the last twelve months, with revenue growing at 8.25%. InvestingPro subscribers can access 8 additional key insights about UiPath’s performance in their comprehensive Pro Research Report.
While net new annual recurring revenue (ARR) decreased 30% year-over-year, UiPath’s guidance suggests improvements in the second half of the fiscal year. Needham noted that similar volume-based companies typically require multiple quarters to work through downsell dynamics before growth reaccelerates. Based on InvestingPro’s Fair Value analysis, UiPath currently appears undervalued, suggesting potential upside for investors.
The analyst reported that macroeconomic commentary from UiPath remained steady, while federal spending has "started to thaw," potentially unlocking deal activity that had been delayed in recent quarters. Early traction with the company’s agentic automation technology appears positive, though Needham doesn’t expect it to materially contribute to growth until the second half of fiscal year 2027.
UiPath provided what Needham termed a "decent raise" to guidance after adjusting for incremental foreign exchange tailwinds, further supporting the analyst’s incrementally more positive view on the stock.
In other recent news, UiPath Inc. reported its financial results for the second quarter of 2025, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $0.15, significantly beating the forecasted $0.09, representing a 66.67% surprise. Revenue also exceeded expectations, reaching $362 million compared to the projected $347.35 million. Despite these positive results, BMO Capital lowered its price target for UiPath to $12.50 from $15.50, citing concerns about the company’s Annual Recurring Revenue (ARR), which saw a 30% year-over-year decline. DA Davidson also adjusted its outlook, maintaining a Neutral rating while reducing the price target to $12.00 from $14.00. This decision followed UiPath’s report of strong second-quarter results and better-than-expected guidance. These developments reflect ongoing adjustments by analysts in response to UiPath’s recent performance and outlook.
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