UiPath stock stabilizes in public sector, KeyBanc maintains rating

Investing.com - KeyBanc has maintained its Sector Weight rating on UiPath Inc. (NYSE:PATH) following the company’s second-quarter financial results, which showed signs of stabilization in its U.S. public sector business. According to InvestingPro data, UiPath maintains strong fundamentals with a current ratio of 2.75 and holds more cash than debt on its balance sheet.

UiPath delivered what KeyBanc described as a "good beat and raise" quarter, posting a modest annual recurring revenue (ARR) beat and raising its fiscal year 2026 ARR guidance to approximately 10.2% year-over-year growth. The company’s revenue grew 8.25% over the last twelve months, reaching $1.5 billion.

The company reported improved traction with its artificial intelligence and Agentic products, while also benefiting from favorable foreign exchange conditions during the quarter.

Profitability emerged as a highlight in UiPath’s results, with the company reporting better-than-expected operating margin results for the second quarter and increasing its fiscal year operating margin outlook to approximately 21.5%.

Despite these positive developments, KeyBanc maintained its Sector Weight rating, citing that the Agentic opportunity remains in early stages and noting continued macroeconomic variability as factors in its cautious stance.

In other recent news, UiPath Inc. reported its financial results for the second quarter of 2025, surpassing analysts’ expectations with an earnings per share (EPS) of $0.15, compared to the forecasted $0.09. The company also exceeded revenue projections, reporting $362 million against the expected $347.35 million. Despite these positive results, BMO Capital lowered its price target for UiPath to $12.50, citing concerns over Annual Recurring Revenue (ARR), which, despite exceeding estimates, declined 30% year-over-year. DA Davidson also adjusted its price target to $12.00 from $14.00, maintaining a Neutral rating on the stock. Needham analyst Scott Berg reiterated a Hold rating, noting early signs of business stabilization. UiPath’s net revenue retention (NRR) remained steady at 108% quarter-over-quarter, following a significant decline over the past two years. These developments reflect a complex landscape for the company, with mixed analyst perspectives despite strong quarterly results.

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