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On Thursday, DA Davidson signaled confidence in the performance of UiPath Inc. (NYSE: NYSE:), adjusting its price target on the company’s shares to $24, up from the previous target of $20. The firm maintained a neutral stance on the stock despite acknowledging the company’s solid execution in expanding its enterprise customer base.
UiPath’s fourth-quarter results showcased its successful strategy in deepening engagement with its existing enterprise customers. The company reported a significant 50% year-over-year increase in customers generating more than $5 million in annual recurring revenue (ARR), highlighting the effectiveness of UiPath’s platform approach to automation. This customer growth compares favorably to a 26% increase in customers with over $1 million in ARR.
The company’s fiscal year 2025 outlook slightly exceeded expectations in terms of growth and profitability, meriting recognition. DA Davidson’s revised price target reflects an enterprise value-to-sales ratio of 7.8 times, aligning UiPath with its industry peers that exhibit similar growth trajectories.
UiPath’s strategic emphasis on serving large enterprises with a suite of automation and artificial intelligence (AI) tools has proven fruitful. The company’s broad range of offerings is increasingly being adopted by large customers who previously may have only utilized UiPath’s robotic process automation (RPA) solutions.
Notably, UiPath is also developing its own large language models (LLMs), which are expected to enhance its Intelligent Document Processing module, a rapidly growing segment of its product portfolio. This innovation is part of a series of AI tools in the pipeline, which are expected to further cement UiPath’s position in the automation industry.
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