Market Discoverer

Investment Idea for US and Hong Kong Market

silver imac displaying line graph placed on desk

All You Need to Know About Robotic Automation Expert UiPath Inc. (PATH)

What is UiPath?

UiPath is primarily a global software company that belongs to the artificial intelligence industry and provides its services in the Robotic Process Automation niche. The company provides an end-to-end platform that yields automation with user emulation at its core. Essentially, it helps organizations to swiftly scale digital business operations by combining the leading Robotic Process Automation (RPA) solution with a full suite of capabilities.

Founded in Romania back in 2005 and later headquartered in New York City, the company generates the majority of its revenues from the US, followed by Romania and the rest of the world. Its major source of revenue is the sale of licenses for its software, maintenance, and technical support. It aims to convert traditional enterprises into automated enterprises, where companies can utilize the aid of automation to break the ceilings of their potential.

Now moving onto the firm’s stock. Initially, the firm had planned to and even filed for IPO in late March. At the time the company was credited with a valuation that was significantly lower than their self-valuation of $35 billion. Thenceforth, the company gradually increased its estimated valuation and price of its public offering

The dip in software stocks from Feb 1, was considered to be an important deciding factor of UiPath’s IPO price. On 20th April, the firm disclosed the price of its class A common stock to be $56 per share, which totaled 23,890,777 shares in its initial public offering. According to its filings with the U.S. Securities and Exchange Commission, they offered 9,416,384 shares of Class A common stock and the prior stockholders including its chairman mentioned in their prospectus offered a combined total of 14,474,393 shares of Class A common stock. The company and investors sold almost 24 million shares in total.

In one of the biggest and most-awaited software initial public offerings in months, the firm’s shares began trading on the New York Stock Exchange on April 21, 2021. Employing the ticker symbol “PATH”, Morgan Stanley and J.P. Morgan acted as the lead book-runners for the offering.

Following the company’s IPO valuation of about $29 billion at the price of $56/share. The shares opened at $65.50 on Wednesday. In the intraday trading that ensued, the shares rose 25% over their IPO price to an intraday high of $70.74. By the day’s end, the shares closed in green at a 23% gain of $69 and a market cap of about $36 billion, and a fully diluted valuation of more than $38 billion.

Despite, the IPO being priced higher than its initial marketed range, it resulted in the company being valued lower than its financing round in February when it gathered $700 million. This may have occured due to the firm’s reported net loss of $92 million on $608 million revenue in the 2021 fiscal year ending on the 31st of January. Its net loss narrowed from $520 million a year ago thanks to foreign exchange gains. It had $336 million in revenue a year earlier.

The firm has lots of competitors that it needs to keep under vigilance. Currently, UiPath is trailing close behind one of its biggest competitors, Snowflake, who at the time of its IPO in September 2020 possessed a market value of $33 billion. UiPath’s market cap was similar to another one of its competitors, Applovin Corp, which also went public in April 2021.

Since its initiation, the stock has witnessed an interday high of about $80 and hasn’t yet fallen below its opening price. The stock experienced some volatility on the 22nd of April. On the 23rd, however, the stock closed in red, experiencing very low volatility. At its close on April 23, 2021, subject to customary closing conditions. The stock had a price valuation of $74.84 and a market cap of about $18.53 Million.

Now that we’ve discussed most past aspects of the stock let’s look at its prospects. On Wednesday, Ark Investment Management led by Cathie Wood purchased millions of shares of the stock. To do that Cathie Wood had to cut back on her investments in Tesla and deploy all six of her firm’s active ETFs to obtain the 2.74 million shares. Considering the passion and high hopes she is reported to have for Tesla, this choice strengthens PATH’s prospects both in terms of market value and investor interest.

The pandemic era has promoted and magnified the importance and use of “robotic process automation”. UiPath is in the business of creating this software that helps automate business tasks and differentiates itself from its rivals by enabling its employees with no prior coding experience to customize the artificial-intelligence services their firm supplies, making them more user-friendly.

Analysts forecast firms running automation technologies such as UiPath to have a huge economic impact worth trillions in a few years. Although, when the pandemic is in the back-mirror some people believe these technologies which help automate business operations in a way that curtails the need for human interventions, will stop being so important.

They couldn’t be more wrong. Although, the lockdowns caused by the pandemic spurred demand for firms such as UiPath but that wasn’t the only reason. If you visit UiPath’s website they’ve described themselves as “Hello, we’re UiPath. We make software robots, so people don’t have to be robots. The firm at its core is a service providing luxury and once you’ve had a taste of luxury it’s hard to go back. It was this taste of luxury that enabled UiPath to obtain a valuation so high. It is undeniable that Artificial Intelligence and Robotics, just like cryptocurrencies is the new future.

Investment Disclaimers

Join 80 other subscribers

%d bloggers like this: