Quarterly beats are of scant use these days if the outlook is unfavorable. It’s a story which has repeated itself regularly in recent times and so it proved again when UiPath (PATH) released F4Q22’s results after Wednesday’s bell.
The automation software specialist delivered revenue of $289.7 million, amounting to ~39% year-over-year increase and beating the Street’s $283 million estimate. Non-GAAP EPS of $0.05 also came in ahead of the analysts’ forecast of $0.03. ARR (annual recurring revenue) growth – a key metric in the SaaS space – accelerated to 59%.
However, that mattered little to investors, who sent shares tumbling in the subsequent session as the outlook failed to impress and indicated the growth curve is heading in the wrong direction.
F1Q23’s revenue is anticipated to be in the of $223 million to $225 million range. Consensus had $246.80 million. For ARR, the company guided for between $960 million to $965 million, but the analysts were looking for $968.2 million. Russian exposure and FX headwinds are partly to blame for the muted outlook.
RBC analyst Matthew Hedberg says “more conservative close rate assumptions on large deals and potential sales disruptions around the new CRO,” are probably a factor too.
Furthermore, the company announced the departure of Chief Revenue Officer Thomas Hansen and have appointed former Microsoft exec Chris Weber to the role of Chief Business Officer.
The latest developments, says Hedberg, “overshadow” the quarter’s performance. “Large deal caution due to macro uncertainty and a CRO leadership transition negatively impact the initial FY/23 outlook and likely results in investors taking a more wait-and-see approach around the changes,” the analyst expounded.
Although over the longer-term, Hedberg thinks the company remains “well positioned for the sizable opportunity around automation,” the analyst sticks with a Sector Perform (i.e., Hold) rating, whilst lowering the price target from $37 to $32. Nevertheless, there’s still upside of ~45% from current levels. (To watch Hedberg’s track record, click here)
Overall, however, Hedberg is among a minority on Wall Street. Of the 16 current analyst reviews, 11 say Buy and 5 recommend Hold, all coalescing to a Moderate Buy consensus rating. At $39.16, the average price target is more aggressive than Anmuth’s and implies upside potential of ~78%. (See UiPath stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
