Shares of UiPath (PATH +3.92%) rallied on Monday, with shares up 10.5% as of 3 p.m. ET.
UiPAth received a positive sell-side analyst note today, and was discussed extensively on Reddit message board Wall Street Bets (WSB) over the weekend. The combination sent UiPath shares rising, given that shares still trade some 85% below their 2021 all-time high.
NYSE: PATH
Key Data Points
Truist gives a thumbs-up, but WSB takes it from there
On Monday, Truist Financial analyst Terry Tillman wrote a note saying he came away "increasingly confident" in UiPath being able to meet or exceed its full-year outlook given on its recent earnings release, following a meeting last week with the company's CFO, chief operating officer, and investor relations team. That being said, Tillman didn't change his price target on the stock, leaving it at $12 per share and giving UiPath a hold rating.
While the commentary on full-year guidance is nice, the note by itself probably wasn't enough to get the stock moving as much as it did today. Likely, the extra boost was provided by meme stock traders on the Reddit message board Wall Street Bets. Mentions of UiPath have increased recently, with one WSB monitor citing a 500% increase in mentions for the stock over the weekend. That likely came when one popular WSB Redditor posted Friday that his next big stock bet is UiPath. If other message board traders follow this poster's bet, that could be spurring buying and short covering action on Monday.
Image source: Getty Images.
Do your own due diligence
UiPath is still down hugely from its 2021 highs, so if it can harness the power of AI to boost its automation software, the stock could stage a comeback. However, AI also has the potential to raise competition for UiPath, given that a number of AI companies, from the "Magnificent Seven" to OpenAI, are all looking to serve enterprises with AI automation tools.
That being said, that competitive threat has made UiPath trade rather cheaply for a software company, at just 4.3 times sales and 18 times next year's adjusted earnings estimates.
