UiPath (PATH) stock is struggling for direction Friday even after the enterprise automation company beat top- and bottom-line expectations for its second quarter and raised its full-year outlook.
In the three months ended July 31, UiPath's revenue increased 10.1% year-over-year to $316.3 million, driven by a 21.7% jump in subscription revenue to $194.7 million. Its earnings per share (EPS) declined to 4 cents from 9 cents in the year-ago period.
"We are pleased with our second quarter results, with annual recurring revenue growing 19% year-over-year, a testament to the team's improved execution and the compelling value that our AI-powered automation platform delivers to our customers," said UiPath CEO Daniel Dines in a statement.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The executive adds that conversations with clients "deepen our conviction that there is an increasing need for AI and automation, and our unwavering commitment to innovation continues to position us as the automation platform of choice for capturing the opportunities that AI brings to an enterprise."
The results beat analysts' expectations. Wall Street was anticipating revenue of $304 million and earnings of 3 cents per share, according to CNBC.
"We delivered durable growth at scale while driving disciplined decision-making, enabling us to raise our profitability guidance for the full year," said UiPath Chief Financial Officer Ashim Gupta in a statement. The company now anticipates revenue in the range of $1.42 billion to $1.425 billion, up from its previous forecast of $1.405 billion to $1.41 billion.
UiPath also announced a $500 million expansion to its share repurchase program. With the new authorization, the company can now repurchase up to $554 million of its outstanding shares, or roughly 8% of its current market cap. Stock buybacks can help boost the share price.
Is UiPath stock a buy, sell or hold?
Today's technical troubles are just more of the same for UiPath, which is down roughly 51% for the year to date. And Wall Street is on the sidelines when it comes to the tech stock.
According to S&P Global Market Intelligence, the average analyst target price for the PATH stock is $15.71, representing implied upside of over 20% to current levels. Meanwhile, the consensus recommendation is a Hold.
Financial services firm Oppenheimer is one of those with a Perform rating (equivalent to a Hold) on PATH stock.
"UiPath is the defining pure-play software supplier in Robotic process automation and exerts a market leadership position," says Oppenheimer analyst Brian Schwartz. "It is the largest pure-play company by revenue and is also one of the fastest growers in the category too. However, execution has been inconsistent and the business is in transition. We believe shares are fairly valued at current levels, and we would wait on the sidelines for a better entry point."
Related Content
-
Eight Ways To Save on Your Next Luxury TripLooking for ways to stretch your retirement dollars? Follow these tips to get a deal on your next vacation.
-
Donating Complex Assets Doesn't Have to Be ComplicatedIf you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
Donating Complex Assets Doesn't Have to Be Complicated
If you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
What's Next for Stocks After a Chaotic SpringA chaotic tariff policy buffets investors looking for clarity on the economy and inflation.
-
Think a Repeal of the Estate Tax Wouldn't Affect You? WrongThe wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
In Your 50s? We Need to Talk About Long-Term CareMany people don't like thinking about long-term care, but most people will need it. This financial professional recommends planning for these costs as early as possible to avoid stress later.
-
Where to Invest in an Uncertain MarketIn an uncertain market, you can still pocket juicy payouts ranging from 4% to 14%, depending on risk.
-
My First $1 Million: Events Industry CEO, 65, Northern New JerseyEver wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
Social Security Pop Quiz: Are You Among the 89% of Americans Who'd Fail?Shockingly few people have any clue what their Social Security benefits could be. This financial adviser notes it's essential to understand that info and when it might be best to access your benefits.
-
Stock Market Today: Investors Look on the Bright SideA generally good week closes on another positive note, as investors, traders and speculators look for fresh catalysts.
