Home Why UiPath Stock Dropped Close To Its Pre-Market Value

Why UiPath Stock Dropped Close To Its Pre-Market Value

by sol-admin

This week, UiPath (NYSE: PATH) issued the release of its Q2 2022 results which caused UiPath stock to fall by 9.6% on Wednesday. Here is a brief analysis of why this has happened.

Although UiPath’s revenue was up 40% year-over-year to $195.52 million, about $8 million above consensus estimates, the company also reported a second-quarter loss of $100 million, or 19 cents a share, versus net income of $5 million in the year-ago period. That seems to be the main reason, but let’s figure out why the company is still not profitable.

As a leader in RPA technology, UiPath helps organizations become more efficient. By using software to automate repetitive and often mind-numbing tasks, companies can slash costs and boost the productivity and morale of their employees. It’s a potentially massive market, one that UiPath pegs at a whopping $60 billion.

With $1.9 billion in cash reserves, UiPath is wisely choosing to invest aggressively in its expansion. This spending is weighing on its current profitability, but more importantly, it’s helping to position the company for sustained success within the rapidly growing business-automation market.

Traders’ short-term expectations might have simply been too high, which likely contributed to today’s sell-off. But more patient investors might be better served by considering UiPath’s intriguing long-term prospects, particularly if its stock continues to sell off in the coming days.

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