Earnings Update: UiPath Inc. (NYSE:PATH) Just Reported And Analysts Are Trimming Their Forecasts

Shareholders in UiPath Inc. (NYSE:PATH) had a terrible week, as shares crashed 35% to US$12.26 in the week since its latest quarterly results. Revenues were in line with expectations, at US$335m, while statutory losses ballooned to US$0.05 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for UiPath

Following the latest results, UiPath's 22 analysts are now forecasting revenues of US$1.43b in 2025. This would be a credible 6.0% improvement in revenue compared to the last 12 months. Per-share losses are expected to explode, reaching US$0.26 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.56b and losses of US$0.083 per share in 2025. So it's pretty clear the analysts have mixed opinions on UiPath after this update; revenues were downgraded and per-share losses expected to increase.

The average price target fell 36% to US$17.82, implicitly signalling that lower earnings per share are a leading indicator for UiPath's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values UiPath at US$29.00 per share, while the most bearish prices it at US$13.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that UiPath's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 8.1% growth on an annualised basis. This is compared to a historical growth rate of 21% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 13% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than UiPath.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at UiPath. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of UiPath's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on UiPath. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple UiPath analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - UiPath has 3 warning signs we think you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.