Ready to join the automation revolution? It’s coming whether you like it or not, and enterprise automation software maker UiPath (NYSE:PATH) is poised to be a major part of this movement. So, if you’re looking for a ground-floor opportunity, PATH stock seems like an obvious choice. Yet, shares have drifted down for the past five months.
Judging from the dismal price action of PATH stock, one might conclude the company is in trouble. However, the evidence suggests that UiPath is doing well. In fact, it recently reported a 60% year-over-year increase in its annual recurring revenue for the second quarter. What’s more, overall Q2 revenue surged 40% from a year ago to $195.5 million.
Besides, at least two well-known cloud-focused businesses are willing to collaborate with UiPath to leverage the power of automation. To me, that’s a clear sign that PATH stockholders will have their day in the sun soon.
A Closer Look at PATH Stock
PATH stock shot up 23% on its first day of trading, powering its way up to a closing price of $69. The bullish momentum persisted for a while longer, with the share price reaching a peak of $90 on May 28.
Unfortunately, it was all downhill after that. UiPath’s share price fell over the ensuing months, hitting a low of $47.20 in mid-October. Today, PATH stock has managed to climb back above the $50 level, but it still sits more than 40% below its all-time high.
Momentum-focused traders no doubt see the glass as half empty given the bearish trajectory in the stock in recent months. But contrarian investors are likely to take a glass-half-full approach: If you liked UiPath when the share price was $90, and the company hasn’t changed fundamentally, then you should love it at $50 a share.
Breaking New Ground
Just to recap, UiPath’s software allows businesses to increase their efficiency by automating repetitive tasks. The software achieves this goal through robotic process automation (RPA). UiPath claims to be the world’s leading RPA software company.
RPA software can perform a wide range of defined actions. These include understanding what’s on a screen, identifying and extracting data, implementing the right keystrokes, navigating systems and so on. This technology can readily be applied to cloud and cybersecurity applications.
Case in point, CrowdStrike (NASDAQ:CRWD) is collaborating to combine UiPath’s RPA software with the CrowdStrike Falcon platform. Hopefully, the end result will be more effective cyber threat hunting, investigation and remediation. The RPA software “robots” can help to detect and defend against all types of cyberattacks, from malware to sophisticated and stealthy nation-state attacks.
With this partnership, UiPath and CrowdStrike are breaking new ground as “the first RPA and Endpoint Security vendors to come together to extend endpoint security to RPA, enabling full visibility to enhance protection and speed of response,” according to the press release announcing the collaboration.
The UiPath-CrowdStrike alliance sounds like a win-win for all stakeholders, but it’s not the only cloud collaboration in the works.
Going Deeper Into the Cloud
UiPath recently announced a partnership with data cloud company Snowflake (NYSE:SNOW). The two companies are seeking to help organizations that are looking to move to the cloud, which is practically a necessity nowadays.
UiPath’s RPA software can help businesses in industries such as healthcare, financial services and insurance make the transition so they can store and analyze their data securely in the cloud.
UiPath Senior Vice President for Alliances and Business Development Dhruv Asher clarified how the partnership can provide value for a variety of businesses: “With this new partnership, UiPath and Snowflake will serve the growing market demand to enable our joint customers to accelerate analytics and automation at scale and succeed in their digital transformation initiatives.”
The Bottom Line on PATH Stock
As you can see, well-regarded companies are acknowledging and leveraging the transformative potential of UiPath’s RPA software. Perhaps Wall Street doesn’t appreciate the importance of this technology. They’ll eventually figure it out, or at least they’ll see the bottom-line benefits for UiPath and its clients and partners.
Until then, feel free to collect some shares of PATH stock, which won’t likely be available at a discount price for much longer.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.