UiPath Inc. ( NYSE:PATH ) debuted with a bang. Its valuation rose 23% on its trading debut in April, with a valuation of US$35.8b on that day.
Yet, the stock has not moved much since then, currently valued at US$32.2b. Even a positive earnings surprise in June failed to push it higher. In this article, we examine its breakeven timeline.
After falling to a new low, the stock seems to be recovering, returning toward the support level at $65. While the following earnings report should land sometime in early September, it is essential to note that the lockup period expires on the 18th of October. The insiders who hold 22.6% of the company will likely be selling some at that time.
Meanwhile, the interest from institutions remains relatively low, with a combined stake of 14.2%. The most famous among them is ARK Investment Management that owns a US$716m stake.
It is no surprise that „growth chasers“ are after the stock, as Financial Times listed it as the second fastest-growing company in America, quoting the compound annual growth rate (CAGR) of 621.5%. The company now has over 8,500 customers worldwide, including over 1,000, with an average recurring revenue (ARR) of US$100,000 or more.
UiPath Inc. provides an end-to-end automation platform that offers a range of robotic process automation (RPA) solutions in the United States, Romania, and Japan. The Robotic Process Automation (RPA) market is lucrative, with projections to grow at a CAGR of 24.9% between 2020 and 2027.
The US$32b market-cap company posted a loss in its most recent financial year of US$92m and a latest trailing-twelve-month loss of US$279m, leading to an even wider gap between loss and breakeven.
According to the 20 industry analysts covering UiPath, the consensus is that breakeven is near.
They expect the company to post a final loss in -1 before turning a profit. So, the company is predicted to break even approximately12 months from now or less.
How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven?
Working backward from analyst estimates, it turns out that they expect the company to grow 40% year-on-year, on average, which signals high confidence from analysts. This is a high assumption, but it falls in line with the recent results and the projections about the industry.
Underlying developments driving UiPath's growth aren't the focus of this broad overview. However, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Yet, there is one aspect worth mentioning. UiPath currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity.
The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
There are too many aspects of UiPath to cover in one brief article. Still, the key fundamentals for the company can all be found in one place: UiPath's company page on Simply Wall St . We've also put together a list of important factors you should further examine:
- Valuation: What is UiPath worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether UiPath is currently mispriced by the market.
- Management Team: An experienced management team at the helm increases our confidence in the business: take a look at who sits on UiPath's board and the CEO's background.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Simply Wall St analyst Stjepan Kalinic and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. 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.