Wells Fargo analysts downgraded UiPath Inc (NYSE:PATH) shares to Equal Weight from Overweight with the price target unchanged at $20 per share.
The analysts made a move after seeing PATH stock climb ~44% year-to-date vs Nasdaq’s gains of ~26%.
“We think the initial turnaround is mostly priced in & find it hard to suggest further premium given slowing ARR growth and still some AI- and GTM-related uncertainty ahead,” analysts said in a client note.
They also argue that artificial intelligence (AI) could actually threaten growth products and suite selling.
“While we don't see meaningful NT risk to PATH's core unattended bots (back-office, well-defined tasks), we see greater LT risks to the rest of the platform, i.e., products expected to help drive future growth. We think the entry of gen AI could affect growth/adoption across these other categories (attended bots, doc understanding, comms mining, etc.) despite PATH aiming to add its own AI features or bundling these products alongside core RPA,” the analysts added.
PATH shares are down 2% on Friday.