UiPath's stock dives 30% on outlook miss, CEO transition; analysts downgrade

Published 29/05/2024, 21:22
© Reuters
PATH
-

UiPath Inc. (NYSE:PATH) reported a solid set of first-quarter results, however, the soft guidance sent shares sharply lower in premarket trading Thursday.

UiPath reported its first-quarter earnings per share (EPS) of $0.13, which was slightly higher than the analyst projection of $0.12.

The company's revenue for the quarter also surpassed expectations, coming in at $335.1 million against the anticipated $333.88 million.

Looking ahead, UiPath provided guidance for its second-quarter revenue, projecting between $300 million and $305 million. This forecast falls short of the market consensus, which had estimated a higher revenue of $342.4 million.

For the full fiscal year 2025, UiPath anticipates revenues to be in the range of $1.405 billion to $1.410 billion, which is sharply below the consensus estimates of $1.56 billion.

Moreover, investors were hit with the surprising news of Rob Enslin resigning as CEO and member of the board effective June 1st. Daniel Dines, founder, former CEO, and current Chief Innovation Officer, will return to the role of CEO.

UiPath stock tumbled nearly 30% on the news.

"While our revenue and operating margin guidance are impacted by contract timing and duration, we have confidence in our ability to generate durable ARR growth at scale, and meaningful non-GAAP adjusted free cash flow," the company's officials said.

The company also forecasts its ARR to reach between $1.660 billion and $1.665 billion by January 31, 2025. 

Commenting on Wednesday's developments, RBC Capital Markets analysts said results were 'messy' while the CEO transition is 'surprising.'

Meanwhile, KeyBanc Capital Markets analysts downgraded the stock to Sector Weight from Overweight after the report.

"Previously, our thesis was predicated on the Company improving its execution and GTM to drive further expansion and platform adoption," they wrote. 

"With the upcoming leadership changes, we see heightened near-term execution risk posing a more challenging path back to 20% ARR growth levels," they added.

Similarly, TD Cowen analysts also downgraded the stock from Buy to Hold, citing "a notable 1-2 punch that's apt to drive significant share pressure & likely leaves shares languishing as Street attempts to comprehend this rapid deterioration & recovery timeframe."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.