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Fountainhead Investing

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UiPath: The Path Forward Is Getting Smoother

  • UiPath’s competitive edge lies in its AI integration, SAP partnership and industry-agnostic automation solutions, making it a strong contender in RPA despite generative AI threats.
  • Recent struggles were due to sales execution issues, and competition, but the company shows signs of recovery with strategic changes and a focus on large clients and collaborations.
  • Founder Daniel Dines’ return as CEO, workforce reductions, and strategic partnerships, especially with SAP, are pivotal in steering UiPath back on track.
  • Despite current challenges, UiPath’s strong cash position, cost-saving measures, and promising AI Agentic capabilities make it a worthwhile investment with limited downside risk.

UiPath’s (PATH) updated financial forecast and current valuation do make a great case for investment as a GARP, now that it’s likely to grow only in the mid-teens, valued at just 5X sales, and 25x adjusted earnings. Besides, cash flow is almost double the adjusted operating income, so that too is a plus. I own some and plan to accumulate on declines.

Here’s the complete article on Seeking Alpha.

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