© Reuters. UiPath’s (PATH) Go-To-Market Restructuring Not an Overnight Fix – Barclays
By Sam Boughedda
Barclays analysts downgraded shares of UiPath Inc (NYSE:) to Equal Weight from Overweight in a note on Tuesday, cutting the price target to $15 from $17 per share.
They said UiPath’s go-to-market changes are not an overnight fix, and the company is in a digestive phase from leadership changes, and its go-to-market restructuring will “prevent it from being a significant outperformer in the near-term.”
“We think the reorganization positions the firm better in the future, but in the interim the impact of these initiatives are expected to drive a Rule of 40 of ~20% in FY24, which materially trails SaaS peers,” the analysts explained.
“Given the increased competition in the space from vendors like Microsoft (NASDAQ:) and ServiceNow (NYSE:) and the convergence in the industry with low-code/no-code vendors expanding RPA solutions, investors may attribute the lower growth outlook from the GTM transformation as a signal that PATH is losing market share or the market opportunity is not as exciting as previously thought,” added the analysts.
However, Barclays pushes back against this but believes it is difficult to disprove until growth reaccelerates, which they model to occur only in FY25.
“Hence, this could provide an overhang on the stock for some time,” the analysts concluded.
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