PATH - UiPath stock down 30%: here's how its new CEO plans on fixing it
2024-05-30 10:11:07 ET
UiPath Inc (NYSE: PATH) is down about 30% on Thursday after Rob Enslin resigned as its chief executive – effective June 1 st .
Daniel Dines returns as UiPath CEO
Daniel Dines who cofounded the global software firm in 2005 and has been serving as its chief innovation officer since last year will replace Enslin in the top role.
UiPath stock is being punished this morning also because it lowered guidance for revenue in fiscal 2025.
But Rob Enslin did not join the earnings call last night to discuss factors that contributed to the weaker sales outlook. That responsibility was left solely with Dines who attributed it partially to a “challenging macro environment and inconsistent execution”.
Note that UiPath shares are now down well over 50% versus their year-to-date high in February.
Dines sees AI as a tailwind for UiPath stock
Daniel Dines agreed on the earnings call that investments the New York listed firm has made are not optimally serving their purpose of re-accelerating growth.
In fact, they’ve made “less agile in responding to customer needs and created short-term pressure on operating margins”, he added.
That’s where he intends to begin on his journey of fixing all that’s wrong with the UiPath stock. To that end, the company will now commit more to artificial intelligence.
“Our focus isn’t just on boosting productivity and efficiency [but] also redefining what’s possible with the breadth of our AI platform”, the incoming CEO said on the call last night.
Wall Street currently has a consensus “overweight” rating on UiPath stock.
has the opportunity to grow share
Dines is confident that Gen AI is a secular tailwind and a “catalyst to innovate across our platform and expand our competitive moat”.
While some challenges may be not be controllable – others certainly are including better execution aimed at “improved sales linearity and deal scrutiny” and commitment to building a customer-centric organisation, he noted.
Such changes, he’s convinced, will position UiPath stock “to drive market share gains over the medium and long-term”.
Finally, Daniel Dines confirmed that Rob Enslin decided to quit for “personal reasons” and will remain with as an advisor to “make it a bit easier for me to step back into day-to-day operational role”.
UiPath now forecasts its sales to top at $1.41 billion in fiscal 2025 versus up to $1.56 billion it had guided for earlier. Shares of the New York headquartered firm do not currently pay a dividend.
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