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Wells Fargo analyst Michael Turrin maintained his $20 price target on UiPath.
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UiPath
stock was declining Friday after an analyst downgraded shares of the business- automation software company, citing concern about how the rise of artificial intelligence could affect it.
Wells Fargo analyst Michael Turrin lowered his rating on stock in
UiPath
(ticker: PATH) to Equal Weight from Overweight, but maintained his target of $20 for the price. Shares of UiPath were down 1.2% Friday to $18.06.
“With shares up [about] 44% year-to-date, we think the initial turnaround is mostly priced in and find it hard to suggest further premium given slowing ARR [annual recurring revenue growth] and still some AI…related uncertainty ahead,” Turrin wrote in a research note.
Turrin added that he sees long-term risks to the company as “the entry of generative AI could affect growth/adoption across these other categories
(attended bots, doc understanding, comms mining, etc.) despite PATH aiming to add its own AI features.”
Turrin isn’t the only analyst that has concerns about the effects of AI on UiPath.
At the end of May, UiPath reported strong fiscal first-quarter financial results, but provided weaker-than-expected guidance for the July quarter.
“UiPath has high execution risk as the business faces multifaceted headwinds from AI commoditization, competition, and a sales-model transition,” analysts at Oppenheimer wrote in a research note at the time.
Oppenheimer
has a Hold rating on the stock.
Of the 21 analysts surveyed by FactSet, nine say the stock is a Buy, while 12 rate it at Hold.
In the company’s most recent earnings call, co-chief executive officer Robert Enslin said “generative AI represents a massive opportunity for UiPath and I am working closely with the team and our customers as we infuse it across our platform and realize its potential.”
Write to Angela Palumbo at [email protected]
Source: https://www.barrons.com/articles/uipath-stock-ai-downgrade-43c92694?siteid=yhoof2&yptr=yahoo