It's been a rough road for enterprise automation software company UiPath (PATH 0.26%), but the company seems to be nearing some sort of bottom from the bear market.

I'm not talking about just the share price, which has been highly volatile in 2023 but nonetheless has rallied nearly 40% this year. Co-founder Daniel Dines recently announced he will be stepping down as co-chief executive starting next year, leaving the role to the other co-CEO, Robert Enslin, who was hired in 2022.

This is a sizable shake-up, and what Dines does next could be incredibly meaningful for UiPath shareholders.

Forging a new path for a new era

The tech world has changed dramatically in the last few years. First the pandemic created a boom for cloud software, followed by the bear market and stock price collapse of 2022, and now the great growth cool-off of 2023 as the economy normalizes from a two-year run of hot inflation. Amid it all, UiPath debuted as a publicly traded company in early 2021.  

It has continued to grow and has made great progress toward reaching profitability. But that hasn't spared it from the bear market, which humbled lofty stock prices in 2022 -- including UiPath's. And now, worries of recession have reduced the company's outlook for annualized revenue growth to 20% for the current fiscal year as customers look for ways to cut or delay costs until the economy firms up.  

Then there's a flood of new artificial intelligence, called generative AI, embodied by the app ChatGPT and large-language model training supported by Nvidia's (NASDAQ: NVDA) powerful chips. UiPath has moved quickly to add ChatGPT's AI into its own services to improve on the automated tasks its software bots can perform. But it nonetheless illustrates the risk UiPath is facing as computing software has quickly pivoted to a new trend in automation in the last year.  

Dines and Enslin refocus

Facing these challenges, with expectations still high for UiPath to continue growing its AI software at a brisk pace, it was time for a C-suite shuffle. Enslin was brought in for his experience executing big growth for other software businesses, the last of which was Alphabet's (NASDAQ: GOOGL)(NASDAQ: GOOG) Google Cloud. He was asked to provide a vision to get UiPath to a larger scale, and he will have the final call on those decisions starting in 2024.

But what of Dines, who co-founded and envisioned UiPath's software-based robotics in the first place? He'll become the company's chief innovation officer, focusing on oversight of engineering efforts of new products.  

This is great news, especially considering how AI's importance has ratcheted up with so many organizations looking for ways to do more with less. Dines has lots of resources at his disposal. With UiPath now generating positive free cash flow, I'm sure there are endless places to deploy the massive $1.78 billion in cash and short-term investments the company has on balance.  

Suffice it to say I like to see the company assigning a top-notch executive to manage its innovation plans. UiPath will still need to prove its merits, so I'm not moving this into my "timely buy" column just yet. After all, the stock trades for nearly 8 times the expected current-year sales, not exactly a bargain given the slowing sales growth that management expects in the coming quarters.

But as calendar year 2024 approaches, perhaps UiPath is about to fire up a new round of innovation to propel more growth. Keep an eye on this one.