UiPath Stock: Is This the Comeback Investors Didn’t See Coming?
After years of disappointment, UiPath is showing signs of a real turnaround: leaner operations, stronger cash flows, and a renewed product focus. Here’s why I’m adding it to my portfolio.
Another software company on my watch list has emerged as a potential purchase following the release of its latest quarterly report.
It is UiPath (PATH 0.00%↑) , another Fallen Angel from the 2021 IPO class that I have been watching closely since its IPO. Coming from the European software industry myself, I have a soft spot for software companies that make it onto the US stock exchanges despite the many structural disadvantages for start-ups from Europe.
The History of UiPath
To me, UiPath is one of the most exciting European software stories of the last decade.
In 2005, Daniel Dines and Marius Tîrcă started out in a Bucharest apartment under the name DeskOver. Initially, they were developers of automation libraries that well-known tech companies incorporated into their products. This laid the technical foundation for their own robotic process automation (RPA) platform, which focuses on automating recurring business processes.
In 2013, the team began to focus fully on RPA, and in 2015, they rebranded as "UiPath" and expanded internationally, opening offices in London and New York, among other locations. Between 2017 and 2020, large financing rounds accelerated UiPath's expansion, and the company grew to become Romania's first "unicorn." The highlight of this high-growth phase was the IPO on the NYSE on April 21, 2021. It was one of the largest U.S. software IPOs at the time, with an offering price of $56 and a valuation of over $35 billion.
After the IPO, UiPath sought to further industrialize its go-to-market strategy, which is why it brought former Google Cloud and SAP executive Rob Enslin on board as co-CEO alongside Dines in April 2022. This occurred a few months before the meteoric rise of Generative AI with ChatGPT.
On February 1, 2024, Enslin became the sole CEO of UiPath. Unfortunately, the timing of this management change coincided with the beginning of the hype surrounding automation with AI agents. UiPath was unable to achieve its ambitious growth targets and fell victim to alleged AI disruption. Just a few months later, the company made a U-turn in its strategy. CEO Rob Enslin, who had focused on scaling sales and marketing, failed and resigned.
In this article, I explain why, after years of observation, I am now investing in UiPath shares.
