UiPath (PATH) Potential Upside As ARR Should Beat Estimates
$UiPath(PATH.US$ is expected to show a rise in quarterly revenue when it reports results on 13 March after market close for the period ending 31 Jan 2024.
UiPath is expected to report a 24.4% increase in revenue to $383.826 million from $308.55 million a year ago, UiPath's guidance on 30 Jan 2023, for the period ended 31 Jan was for revenue between $381.00 million and $386.00 million.
Looking at UiPath's peers in the automation software segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. $Appian(APPN.US$ delivered top-line growth of 15.5% year on year, beating analyst estimates by 3.2% and $Everbridge(EVBG.US$ reported revenue decline of 1.2% year on year, exceeding estimates by 1%. Appian traded up 10.9% on the results.
Technical is showing uptrend prior to its earning release, UiPath should be reporting a better ARR as their automation software sales should surge as a result of companies going into AI productivity automation.
Looking at the 50-day MA period, UiPath look to stay above the period, and should continue this uptrend for a while.
UiPath (PATH) Last Reported Earnings
PATH last reported earnings on 30 Nov 2023 after the market close (AMC). PATH shares gained +26.7% the day following the earnings announcement to close at 25.04. Following its earnings release, 103 days ago, PATH stock has drifted -1.6% lower.
From the time it announced earnings, PATH traded in a range between 21.29 and 27.87. The last price (24.64) is closer to the higher end of range.
Estimated implied straddle for upcoming earnings is 17.0%. We should be seeing quite a significant upside after the earnings, in the range of 10 to 15%.
UiPath (PATH) Post Earnings Movement
The options market overestimated PATH stocks earnings move 64% of the time in the last 11 quarters. The predicted move after earnings announcement was ±15.2% on average vs an average of the actual earnings moves of 14.0% (in absolute terms).
Option valuation is showing overvalued, this suggest price volatility, but I believe the move should be on the upside. I would expect UiPath to move at least 10% after its earnings report.
Summary
We should be seeing similar ARR (annual recurring revenue) from last quarter, and the revenue and operating profit should be in line, this should set the stage for at least 10% upside after earnings.
I will be looking at opportunity to buy UiPath.
Appreciate if you could share your thoughts in the comment section whether you think UiPath would beat the market expectation and surge after its earnings result.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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