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
-
Dow Jones Adds 463 Points as Rate-Cut Odds Rise: Stock Market TodaySome futures traders are now pricing in the possibility of a jumbo rate cut in September, which lifted stocks today.
-
Bullish IPO: Should You Buy BLSH Stock?Wall Street is buzzing about the Bullish IPO. The Peter Thiel-backed crypto company went public on August 13, and BLSH stock nearly doubled in its market debut.
-
Dow Jones Adds 463 Points as Rate-Cut Odds Rise: Stock Market Today
Some futures traders are now pricing in the possibility of a jumbo rate cut in September, which lifted stocks today.
-
Bullish IPO: Should You Buy BLSH Stock?
Wall Street is buzzing about the Bullish IPO. The Peter Thiel-backed crypto company went public on August 13, and BLSH stock nearly doubled in its market debut.
-
How to Build Your Financial Legacy Three Piggy Banks at a TimeA wealth adviser shares a childhood saving technique that taught him lessons of stewardship, generosity and responsibility and helped him answer the question we all need to answer to define our lives by impact rather than greed: 'What is this all for?'
-
Which of These Four Withdrawal Strategies Is Right for You?Your retirement savings may need to last 30 years or more, so don't pick a withdrawal strategy without considering all the options. Here are four to explore.
-
July CPI Report Ignites a Risk-On Rally: Stock Market TodayMarket participants price out worst-case scenarios for tariffs and inflation and will now turn their attention to employment and growth.
-
July CPI Report Boosts Rate-Cut Odds: What the Experts SayThe July CPI report shows that tariffs are having a slight impact on inflation, though not enough to keep the Fed from cutting interest rates.
-
DST Exit Strategies: An Expert Guide to What Happens When the Trust SellsUnderstanding the endgame: How Delaware statutory trust dispositions work, what investors can expect and why the exit is probably more important than the entrance.
-
Think Selling Your Home 'As Is' Means You'll Have No Worries? Think AgainThere are significant risks and legal obligations involved in selling a home 'as is' and by yourself, without a real estate agent.
