Why UiPath Stock Is the Undiscovered AI Gem to Pounce On


  • UiPath (PATH) disclosed a sudden CEO change and reduced its full-year revenue-range forecast.
  • However, UiPath still beat Wall Street’s adjusted-earnings estimate, and the recent share-price sell-off is probably overdone.
  • Investors should consider taking a share position in UiPath stock.
UiPath stock - Why UiPath Stock Is the Undiscovered AI Gem to Pounce On

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Every artificial intelligence stock is overpriced in 2024, right? Wrong! Today I’ve got a secret, underappreciated pick AI stock pick for you. The market doesn’t care much about UiPath (NYSE:PATH), and that’s exactly why you should seriously consider UiPath stock today.

I will not claim that all the news concerning UiPath is 100% positive. Yet, it feels like the market is completely indifferent, or even hostile, toward UiPath right now. Considering the company’s situation, you’ll be convinced to give UiPath a chance.

Why Did UiPath Stock Crash?

Late May was a rough period, to say the least, as UiPath stock crashed from $18 to $12. Was the 33% share-price haircut really justified, though?

I’d say the sell-off was overdone, but we can’t just ignore the unfavorable news. First of all, UiPath lowered its revenue-guidance range fiscal 2025 from $1.555 billion to $1.56 billion previously, to $1.405 billion to $1.41 billion currently.

Rob Enslin resigned as CEO of UiPath, and it appears that the market didn’t expect that announcement. However, it’s not the end of the world for the company, as Enslin was replaced by Daniel Dines, founder and former CEO of UiPath.

As for the revenue-guidance reduction, that’s disappointing but it’s not the full story for UiPath. There are positive data points to note, and investors might consider the UiPath stock sell-off to be irrational.

UiPath: A Revenue Grower in the Age of AI

Just to recap, UiPath offers a “Business Automation Platform” that’s driven by robotics and AI. UiPath helps businesses automate repetitive tasks, and this should be a high-demand service in what might be called the “Age of AI.”

UiPath ought to be a no-brainer AI play for 2024. Yet, investors have largely disregarded UiPath, which is strange, but there could be a prime opportunity here.

In the first quarter of fiscal 2025, UiPath grew its revenue 16% year over year to $335.112 million. Moreover, UiPath narrowed its net earnings loss from $31.901 million (or 6 cents per share) in the year-earlier quarter, to $28.736 million (or 5 cents per share) in Q1 of FY2025.

In that same time frame, UiPath increased its position of cash and cash equivalents from $1.062 billion to $1.147 billion. It’s all about progress, not perfection, and I’m shocked that more investors haven’t discovered the AI-market opportunity with UiPath.

UiPath Stock: When Investors Don’t Care, You Should Be There

AI is red-hot, but UiPath is not. You can let the market’s irrational indifference be your friend in 2024, however, by investing in UiPath.

After all, UiPath’s CEO transition shouldn’t destroy the company. Plus, UiPath recently demonstrated revenue growth and an increase in the company’s capital position. Therefore, today I invite you to pounce on UiPath stock, a secret summertime AI pick for savvy investors.

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 Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, 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.

Article printed from InvestorPlace Media, https://investorplace.com/2024/06/why-uipath-stock-is-the-undiscovered-ai-gem-to-pounce-on/.

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