The stock was down on Friday after an analyst downgraded shares of the business automation software company, citing concerns about how the rise of artificial intelligence could affect it.
Wells Fargo analyst Michael Turrin lowered his rating on the shares in
(ticker: PATH) at Equal Weight from Overweight, but stuck to their $20 prize target. UiPath shares fell 1.2% on Friday to $18.06.
“With shares [about] 44% year-to-date, we believe the initial rally is mostly priced in and find it hard to suggest any additional premium given the slowing ARR [annual recurring revenue growth] and still some AI-related uncertainty to come,” Turrin wrote in a research note.
Turrin added that he sees long-term risks for the company as “the entry of generative AI could affect growth/adoption in these other categories.
(assisted robots, understanding documentation, extracting communications, etc.) despite the fact that PATH aims to add its own AI functionality.
Turrin isn’t the only analyst worried about the effects of AI on UiPath.
At the end of May, UiPath announced strong first quarter financial results, but provided weaker than expected guidance for the July quarter.
“UiPath poses elevated execution risk as the company faces multi-faceted headwinds from the commoditization of AI, competition, and a sales model transition,” the Oppenheimer analysts wrote. in a research note at the time.
has a Hold rating on the stock.
Of the 21 analysts polled by FactSet, nine say the stock is a buy, while 12 rate it a hold.
During the company’s latest earnings call, co-CEO Robert Enslin said, “Generative AI represents a huge opportunity for UiPath and I’m working closely with the team and our customers as we infuse it. on our platform and realize its potential”.
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