UiPath (NYSE:PATH) shares fell around 2% intra-day today after UBS analysts initiated coverage on the stock with a Sell rating and a $14 price target. The assessment reflects concerns about intensifying competition, slowing customer growth, and limited signs of recovery in key performance metrics.
UiPath faces increasing competition from well-funded tech giants and emerging AI startups focused on automating tasks and business processes. This competitive landscape, coupled with a tougher selling environment, has resulted in stagnant customer growth since late 2022, coinciding with the launch of ChatGPT.
Customer retention rates remain under pressure, with no clear evidence of stabilization. Efforts to improve execution through recent organizational changes have yet to deliver significant results, raising doubts about the company’s ability to regain momentum.
Feedback from customers and partners suggested tepid enthusiasm for the growth prospects of the robotic process automation (RPA) market. Reflecting this sentiment, UBS projected net new annual recurring revenue (ARR) to decline by 4% year-over-year in 2025 and by 3% in 2026, significantly underperforming Wall Street expectations of flat growth in 2025 and an 11% increase in 2026.