Shares of UiPath (NYSE:PATH) soared 13.4% in Wednesday’s extended trade after the company reported upbeat results for its fourth quarter of Fiscal Year 2023. Further, UiPath’s guidance exceeded Wall Street’s expectations.
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The company provides a robotic process automation tool that enables users to automate various aspects of business processes.
Revenues increased 7% year-over-year to $308.5 million, surpassing analysts’ estimates of $269.6 million. Meanwhile, the company posted adjusted earnings of $0.15 per share, greater than the Street’s estimate of $0.01 per share. Also, it compared favorably with the $0.05 reported in the last year’s quarter.
The company’s annualized renewal run rate (ARR) rose 30% year-over-year to $1.2 billion. ARR is a key performance metric that reflects the company’s sales expectations based on subscriptions.
During the earnings call, UiPath’s Co-CEO, Rob Enslin, said that the company closed deals worth over $1 million in the reported quarter. Currently, the company has 229 customers that contribute more than $1 million in ARR, along with 1,785 customers that generate $100,000 or more in ARR.
The management is upbeat about its future performance. UiPath expects to report fiscal first-quarter revenue in the range of $270 million to $272 million, higher than the analyst estimates of $269.6 million. For the Fiscal Year 2024, the company forecasts revenue between $1.253 billion and $1.258 billion, versus the consensus estimate of $1.214 billion.
Is Path a Good Stock to Buy?
Growing demand for business automation, along with UiPath’s continued product excellence and ability to innovate, make a strong case for the company. Nevertheless, the impact of ChatGPT on UiPath’s business remains a concern.
Overall, Wall Street is cautiously optimistic about PATH stock. It has a Moderate Buy consensus rating based on two Buys and two Holds. The average price target of $18.88 implies 29% upside potential from the current level.
