On Thursday, DA Davidson adjusted its outlook on UiPath Inc. (NYSE:PATH) shares, significantly reducing the price target from $24.00 to $13.00, while maintaining a Neutral stance on the stock.
The revision follows the company's first-quarter results for fiscal year 2025, which highlighted certain operational difficulties.
The firm noted a decrease in customer spending willingness and go-to-market challenges that are affecting margins. Moreover, the recent reinstatement of Daniel Dines as CEO of UiPath was particularly emphasized as a notable development.
DA Davidson acknowledges the potential for UiPath's issues to be rectified but also signals to investors the likelihood of facing multiple quarters of uncertainty and transition.
The new price target of $13.00 implies an enterprise valuation of 3.8 times the next twelve months' (NTM) sales for UiPath. This adjustment reflects the firm's cautious outlook on the company's short-term performance.
In response to these updates, UiPath's stock showed a significant downturn, with shares pointing to a 29% drop in after-market trading.
This market reaction underscores the impact of the revised expectations and the challenges foreseen by DA Davidson for the automation software company.
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