On Thursday, Macquarie maintained its Outperform rating on shares of UiPath Inc. (NYSE:PATH) and increased the stock price target to $29 from $22. The adjustment followed the company's announcement of its first GAAP-profitable quarter during the fourth fiscal quarter, which concluded the fiscal year 2024 with strong performance metrics.
The company's cloud Annual Recurring Revenue (ARR) reached approximately $650 million, marking a growth of over 70% year-over-year. This significant momentum was highlighted as an indicator that UiPath set a reasonable estimated ARR starting point for the fiscal year 2025.
UiPath's financial results were commended for demonstrating a balanced approach to growth and margin, as well as effective cash flow generation. The firm's performance in cloud ARR was particularly noted for its strong momentum, which contributed to the decision to raise the price target.
The report from Macquarie underscored the importance of UiPath's Rule of 41 execution in its financial strategy. This metric is a gauge for software companies that combines growth rate and profit margins, indicating efficient scaling when above 40.
The new stock price target of $29 reflects the firm's confidence in UiPath's continued growth and operational success, especially in its cloud-based offerings. Macquarie's stance remains positive on the stock, as indicated by the Outperform rating and the raised price target.
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