Shares rose early Thursday after the automation software company beat expectations for revenue growth. However, UiPath was still working to convince analysts that artificial intelligence would be a boon to its business.
(Ticker: PATH) Shares rose 4.3% to $16.92 in premarket trading following the earnings report late Wednesday.
Shares are up 28% this year through Wednesday’s close but have been volatile as investors debate whether the company will benefit or suffer from the rise of artificial intelligence technology. Recent findings do not appear to have settled the debate.
“We have yet to see if generative AI will bring about a truly inimitable differentiation for UiPath in a very competitive and disruptive automation software landscape,” wrote DA Davidson’s Gil Luria in a research note.
Luria raised its price target on UiPath stock to $17 from $16 while maintaining a neutral rating. He said the company has made good progress in improving its margins and free cash flow, but the company is still facing a difficult environment for software sales.
UiPath reported adjusted earnings of 9 cents per share for the quarter ended July, beating analysts’ estimate of 4 cents. Revenue increased 19% to $287.3 million; According to FactSet, analysts were expecting $281.5 million.
Analysts bombarded UiPath executives with a series of questions about how the growth of generative AI was impacting customer spending on the software. Co-CEO Daniel Dines said that generative AI has not changed the competition for his automation platform company and he expects AI to provide a tailwind for UiPath’s business going forward.
For the third quarter, the company forecast revenue of between $313 and $318 million, while annual revenue was between $1.27 and $1.28 billion. Analysts polled by FactSet estimated revenue for the third quarter at $318.5 million and for the full year at $1.27 billion.
The company also announced a $500 million stock repurchase program.
Write to Adam Clark at firstname.lastname@example.org
https://www.barrons.com/articles/uipath-stock-earnings-artificial-intelligence-cfde9bcb?siteid=yhoof2&yptr=yahoo UiPath stock is rising. Revenue growth ignores the AI debate for now.