William Blair analysts started shares of UiPath Inc. (NYSE:PATH) at Outperform in a note to clients Tuesday, saying the automation platform is getting a boost from artificial intelligence (AI).
Analysts said the company is an early mover and has a competitive moat in the workflow automation and process optimization markets.
"The company's platform helps automate manual workflows through user interface (UI) and application programming interface (API)-based automations," explained analysts. "UiPath addresses complex and enterprise-grade processes, which has led to the company's platform becoming mission critical for its customers (as evidenced by its strong gross retention rate of 97%)."
Furthermore, they believe the company's multi-product platform provides it with a nice cross-sell opportunity. The analysts note that over the past few years, UiPath has expanded its product suite beyond traditional RPA use cases and into a broader workflow automation and process optimization platform, as well as moving into new opportunities, such as generative AI, API integration, and application testing.
The company has a "large TAM with plenty of growth drivers," said analysts. "While UiPath is already at a large scale with over $1.3 billion in annual recurring revenue (ARR) and nearly 11,000 customers, we believe its total addressable market (TAM) is significant—UiPath pegs it at $61 billion."
"We believe UiPath's leadership position in a large market for automation technology should help the company deliver durable growth and expanding margins over the next few years," argued analysts.