UiPath (PATH) Stock Forecast & Price Target

UiPath Inc. demonstrated robust growth in its recurring revenue, with committed recurring revenue (cRPO) increasing 14% year-over-year to $820 million and total remaining performance obligations (RPO) rising 12% year-over-year to $1.265 billion. The company reported strong profitability metrics, achieving gross margins of 84.9%, reflecting a consistent improvement in enterprise execution and significant growth in license revenue, particularly from the federal sector. Additionally, UiPath's growth in customer acquisition was notable, with a total customer count of 10,860, including 74 new customers with over $100K in annual recurring revenue, underscoring the strength of its automation solutions and retention metrics.

UiPath's recent financial performance indicates several key issues that contribute to a negative outlook. The decline in Net Revenue Retention (NRR) from 113% in the prior year to 107%, coupled with an 11% year-over-year drop in net new Annual Recurring Revenue (NNARR) to $180.5 million, raises concerns about future revenue growth sustainability. Additionally, despite stable gross retention at 97%, headwinds from foreign exchange fluctuations and shifting revenue recognition practices within the SaaS model further complicate the company's financial trajectory, suggesting potential downward pressure on revenue and margins moving forward.