Index falls as earnings results weigh; pound above $1.33, Bodycote soars
On Thursday, TD Cowen’s analysts adjusted their outlook on UiPath Inc. (NYSE: NYSE:PATH), reducing the price target from the previous $16.00 to $12.00, while maintaining a Hold rating on the company’s shares. With the stock currently trading at $10.04, significantly below its 52-week high of $25.47, InvestingPro analysis suggests the company is trading below its Fair Value. The change in valuation comes as a result of what the firm describes as "Trump Turbulence," referring to the recent shifts in the U.S. administration and the dynamics of the Dogecoin cryptocurrency, which have contributed to a shaky path toward the company’s fiscal year 2026.
The revised price target reflects a series of challenges that the company faced in its fourth-quarter results, which included lighter than expected Annual Recurring Revenue (ARR) and revenue. These results, alongside a forecast that missed expectations for ARR and revenue by 3% for FY26, have prompted the adjustment. Despite this, TD Cowen acknowledged UiPath’s operational rigor, which continues to foster healthy operating margins and Free Cash Flow (FCF). According to InvestingPro data, the company maintains impressive gross profit margins of 83.38% and has achieved revenue growth of 16.5% over the last twelve months. Additionally, UiPath’s strong liquidity position is reflected in its healthy current ratio of 3.13.
However, the analysts at TD Cowen have expressed concerns over the near-term visibility for UiPath and the company’s view of a recovery in the second half of the year, which they anticipate will be met with a high degree of scrutiny due to the current market volatility. They predict that UiPath will likely remain a "show-me/transition story" following the pressure from its recent earnings report.
In their commentary, TD Cowen analysts noted, "US administration change/DOGE dynamics & broader macro uncertainty weighed on 4Q results (light ARR/rev) and PATH’s FY26 outlook (ARR/rev miss by 3%). Op rigor is driving healthy OM & FCF, but limited NT visibility & 2H recovery view is apt to be heavily scrutinized amid significant volatility, and PATH will likely remain a show-me/transition story post print pressure."
The reduction in UiPath’s price target by TD Cowen reflects a cautious approach due to the uncertainties and challenges that the company is currently facing, as well as the broader market conditions that are affecting its performance and outlook. Despite the recent stock decline of over 51% in the past year, InvestingPro maintains a GOOD overall Financial Health score for UiPath, with 10+ additional exclusive insights available for subscribers. For a deeper understanding of UiPath’s valuation and growth prospects, access the comprehensive Pro Research Report, part of the analysis available for 1,400+ US stocks on InvestingPro.
In other recent news, UiPath Inc. reported its fourth-quarter results, which have prompted several financial firms to adjust their price targets for the company’s stock. RBC Capital Markets lowered its price target to $13 from $16, maintaining a Sector Perform rating, citing mixed financial results and a cautious outlook for Fiscal Year 2026. Truist Securities followed suit, cutting its target to $12 from $14, while keeping a Buy rating, due to increased macroeconomic volatility and public sector hesitancy impacting revenue estimates. DA Davidson also reduced its price target to $11 from $15, maintaining a Neutral rating, as the company’s results introduced new uncertainties, particularly concerning U.S. Federal customers.
KeyBanc Capital Markets maintained a Sector Weight rating after noting that UiPath’s Annual Recurring Revenue (ARR) growth fell short of expectations due to geopolitical challenges affecting its U.S. federal business. Scotiabank (TSX:BNS) adjusted its price target to $12 from $15, keeping a Sector Perform rating, and highlighted that UiPath’s revenue guidance of 7% growth did not meet the consensus estimate of 11%. The firm pointed out that macroeconomic uncertainty, especially in the public sector, has impacted the company’s outlook.
Analysts are closely watching UiPath’s progress in artificial intelligence and agentive technology, which are not yet factored into investor expectations. Despite the lowered revenue estimates, firms like RBC and Truist see potential in UiPath’s AI offerings and go-to-market strategies. UiPath’s performance in the first half of Fiscal Year 2026 is expected to be weak, with hopes for a rebound in the second half to achieve growth objectives.
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