UiPath’s Growth Challenges Amid Strong Revenue Performance: Analyst Maintains Hold Rating

Needham analyst Scott Berg has maintained their neutral stance on PATH stock, giving a Hold rating today.

Scott Berg has given his Hold rating due to a combination of factors influencing UiPath’s current financial performance and future outlook. The company reported better-than-expected revenue and operating income, primarily driven by strong license revenue. However, the net new annual recurring revenue (ARR) was significantly lower compared to the previous year, which suggests that recent go-to-market changes and execution improvements are still settling in.
Despite achieving record non-GAAP operating margins for a non-fourth quarter period, the guidance indicates a heavier reliance on the second half of the fiscal year for net new ARR. This shift creates a more challenging growth trajectory, especially with declining key metrics like the net revenue retention rate. As a result, Scott Berg remains cautious and prefers to wait for signs of stabilized growth before considering a more favorable rating.

Berg covers the Technology sector, focusing on stocks such as Amplitude, Five9, and UiPath. According to TipRanks, Berg has an average return of -4.9% and a 39.08% success rate on recommended stocks.

In another report released today, Barclays also maintained a Hold rating on the stock with a $14.00 price target.