© Reuters. UiPath’s (PATH) Go-To-Market Restructuring Is Not an Overnight Fix – Barclays
By Sam Boughedda
Analysts at Barclays 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 that UiPath’s go-to-market changes are not an overnight fix, and that the company is in a melting 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 will better position the company going forward, but in the interim the impact of these initiatives is expected to drive a Rule of 40 of ~20% in FY24, materially lagging SaaS peers ,” analysts explained.
“Due to increased competition in the space from vendors such as Microsoft (NASDAQ:) and ServiceNow (NYSE:) and industry convergence with low-code/no-code vendors deploying RPA solutions, investors may attribute the lower growth outlook from GTM’s transformation as a sign that PATH is losing market share or that the market opportunity is not as exciting as previously thought,” added analyst.
However, Barclays is pushing for it but believes it will be difficult to prove until growth picks up again, which they forecast will only happen in FY25.
“Thus, this may give an overhang to the stock for some time,” the analysts concluded.