UiPath (PATH) Buy $23 Industry: Robotic Automation Processes (RPA)
Secular Growth – 5 Years, Target $55 to $60. Annual Gain around 22%
Why UiPath?
Saving customers money: I believe that for AI to succeed, enterprise software businesses will have to come up with genuine economic and money-saving use cases and applications for their business customers by improving productivity.
Unlocking Data: Mark Moerdler, from Bernstein Research, commented on Barron’s AI Roundtable.
“But arguably, the bigger value creation is going to be unlocking the data within enterprises, to leverage that data to drive efficiencies within organizations, make leaps of intuition in coming up with answers, or make decisions faster, or in some cases reach conclusions you couldn’t previously reach because you didn’t have easy access to the data.”
UiPath is a Robotic Process Automation (RPA) leader, that started improving productivity for its business customers since its inception and the availability of faster chips and new forms of faster, more efficient parallel computing should turbocharge its business.
Fast-growing industry: The RPA industry is in its early stages and has a long runway of fast growth, especially with AI hardware support. The RPA market is expected to grow at an astounding 33% to $27.5Bn, with cognitive or intelligent computing being one of its key drivers.
UiPath generates enough context to create AI solutions
UiPath’s co-founder had this to say on the earnings call
- “To be effective, Generative AI needs context, which our software robots can deliver by gathering information from across the enterprise – in data, documents, CRM, ERP, and beyond. It also needs our platform to take action and operationalize the promise of AI today with an integrated set of capabilities that combines our Specialized AI with Generative AI.
- Yeah, I would like to add that more customers are realizing that automation is a great means to get more value from Generative AI.”
Strong margins and growth – GAAP margin of 83%, revenue growth 21% for the next three years, Adjusted operating profit margin at 15%.