UiPath's Latest Restructuring Did Not Surprise Analysts - Read Why - UiPath (NYSE:PATH)

UiPath, Inc PATH announced a restructuring, including laying off 5% of their workforce, or roughly 200 of their 4,200 employees, as of April 30.
PATH saw $15 million of restructuring costs but increased the mid-point of their non-GAAP operating income by $2 million to $15 million for FY23 while leaving other guidance metrics, including ARR, unchanged.
Overall, Needham analyst Scott Berg was not surprised. He expected companies of PATH's size to drive better GTM efficiencies as they scale.
He does not believe PATH's expansion rate is a read-through for the rest of his coverage as he thinks this change reflects a company-specific strategy and not a macro change.
Needham had a Buy rating on the stock with a price target of $40.
RBC Capital analyst Matthew Hedberg saw the restructuring as related to the go-to-market changes underway to simplify the sales process, drive customer expansion and add new logos through digital sales.
He saw the move as related to ongoing changes vs. reactionary or a proactive action related to changes in demand or the environment.
He remained optimistic about the long-term opportunity.
RBC had a Sector Perform on the stock with a price target of $22.
The market opportunity in terms of global automatable wages is both massive and largely untapped, as per Credit Suisse.
UiPath, with the only purpose-built, end-to-end hyper-automation platform, is leading the paradigm shift toward the fully-automated enterprise, as per the firm.
Although most investors understand the potential addressable robotic process automation market (RPA), many are concerned that increasing competition in the RPA market will slow UiPath's growth.
He believes that UiPath's differentiated, end-to-end platform that can scale from individual workers to company-wide initiatives enabling it to drive strong new customer acquisition, robust customer expansion, and attractive unit economics longer than Wall Street appreciates.
Credit Suisse has an Outperform with a price target of $45.
Price Action: PATH shares are trading lower by 2.81% at $20.76 on the last check Tuesday.

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UiPath's Latest Restructuring Did Not Surprise Analysts - Read Why

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