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UiPath, Inc. PATH shares have declined 48.7% in the year-to-date period against the 36.5% rally of the industry it belongs to and the 24.3% rise in the Zacks S&P 500 composite.
PATH’s performance lags Varonis Systems, Inc. VRNS and Trend Micro Incorporated TMICY, which are its close competitors. VRNS and TMICY have rallied 32.3% and 3.4% in the year-to-date period, respectively.
YTD Price Performance
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However, PATH’s recent performance might paint a different picture. UiPath’s stock has shown a 2.1% rise over the past month, implying that there might be a reversal or a halt in the correction phase. The stock is trading above its 50-day moving average, an indication of bullish sentiment among investors.
PATH Trades Above 50-Day Average
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The recent correction in UiPath’s shares might be flattering for investors. But the critical question arises — is this the right time to invest? Let us find out.
Customer-First Strategy Fuels UiPath’s Growth
In the second quarter of fiscal 2025, PATH reported 10,810 customers, declining from the year-ago quarter’s 10,890. Despite the marginal fall, customers with $100,000 or more in annual recurring revenues (ARR) surged from 1,930 in second-quarter fiscal 2024 to 2,163 in the second quarter of fiscal 2025. Also, customers with $1 million or more in ARR increased 15.3% from the year-ago quarter’s actual.
PATH’s performance in terms of dollar-based gross retention and net retention rate in the second quarter of fiscal 2025 was astounding. Dollar-based gross retention was 97%, and 115% was its net retention rate in the second quarter of fiscal 2025. The company witnessed such expansion due to the quick time to value and wide applicability of its automation platform.
The dynamism of UiPath’s platform capabilities continues to drive customer base expansion, including Australian multinational corporations and customers since 2021 who used the company’s Test Suite to help the migration of SAP S/4HANA. The company expanded post-migration and started to work with PATH’s team to incorporate an automation program at a global scale encompassing core automation, testing and AI. Path’s success is focused on its ability to serve customers, which makes the mindset of being customer-oriented more vital than ever before.
UiPath Hikes Revenue Guidance
PATH raised its revenue prediction for the third quarter and fiscal 2025. The company anticipates a top line of $345-$350 million for the third quarter of fiscal 2025 compared with the view of $300-$305 million given at the end of the previous quarter. UiPath expects its revenues for fiscal 2025 to be $1.420-$1.425 billion compared with the previous quarter’s view of $1.405-$1.410 billion. The company’s management was positive about its actions to drive operational efficiencies and streamline its business, which resulted in raising the guidance.