Is It Finally Time to Dump UiPath Stock?
Recent murmurings around how we should define “agentic AI” are well deserved. What is “agentic AI?” How do we know what companies are advancing this technology? Simply put, agentic AI takes robotic process automation (RPA) to the next level. Whereas before we had recipe-driven software “robots” automating mundane tasks, we now have software “agents” acting more proactively, engaging with each other, and having more authority within an organization, all while being orchestrated by a control center. So, does that mean RPA gets replaced by agentic AI, or empowered by it? That question prompted us to write an aptly titled piece, Could Generative AI Destroy UiPath’s Success Story? Today, we’re more worried that UiPath (PATH) might be destroying its own success story.
How It Started – Declining Growth
It was a sparkling spring day in late May when we alerted our Premium subscribers after UiPath stock crashed 35% on news that the CEO suddenly departed. The former CEO and founder returned to the helm and immediately reduced annual revenue growth guidance to 8%, down from the 19% that we were expecting. So, while they technically beat guidance with 9% revenue growth this year, net retention also plummeted, meaning customers are spending less over time. (More on this in a bit.)
In the May earnings release, the CFO cited “lengthening sales cycles” a
