Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

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Our base case valuation of UiPath is $60.7 per share, which represents a 21% upside from the high end of the IPO price range of $50 per share. Given the moderate upside in the share price using our base case valuation, we have a Positive view of the UiPath IPO. </li>
<li>We forecast the company to generate sales of $982.5 million (up 61.7% YoY), gross profit of $877.8 million (up 62.0% YoY), and an operating loss of $71.2 million in FY ending Jan 2022. From FY ending Jan 2021 to FY ending Jan 2026, we estimate the company's sales to increase by 37.9% CAGR.</li>
<li>UiPath is one of the global leaders in the RPA (robotic process automation) market. Robotic process automation is a form of business process automation technology based on software robots or on artificial intelligence. The company provides a comprehensive range of automation solutions via numerous interrelated software offerings. </li>
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Our base case valuation of UiPath is $60.7 per share, which represents a 21% upside from the high end of the IPO price range of $50 per share. Given the moderate upside in the share price using our base case valuation, we have a Positive view of the UiPath IPO. 
We forecast the company to generate sales of $982.5 million (up 61.7% YoY), gross profit of $877.8 million (up 62.0% YoY), and an operating loss of $71.2 million in FY ending Jan 2022. From FY ending Jan 2021 to FY ending Jan 2026, we estimate the company's sales to increase by 37.9% CAGR.
UiPath is one of the global leaders in the RPA (robotic process automation) market. Robotic process automation is a form of business process automation technology based on software robots or on artificial intelligence. The company provides a comprehensive range of automation solutions via numerous interrelated software offerings. 


<a href="https://www.smartkarma.com/entities/uipath-inc" target="_blank" data-smartkarma-citation="entities:32975:1" rel="noopener">UiPath Inc (PATH US)</a> plans to complete its IPO in the coming days. The IPO price range is between $43 to $50 per share. The<a href="https://www.marketwatch.com/story/uipath-sets-ipo-terms-to-raise-up-to-3404-million-and-be-valued-at-up-to-26-billion-2021-04-12" target="_blank" rel="noopener"> company</a> is offering 6.81 million Class A shares in the IPO. The existing shareholders are offering 14.47 million Class A shares. At the high end of the IPO price of $50 per share, the total amount from the IPO proceeds would be $1.06 billion. After the IPO, there will be a total of 516.55 million Class A and Class B shares outstanding.At the high end of the IPO price range ($50 per share) the company could be valued at nearly $25.8 billion. This is below the company's recent private market valuation of <a href="https://www.usnews.com/news/technology/articles/2021-04-12/software-maker-uipath-aims-for-nearly-26-billion-valuation-in-us-ipo#:~:text=The%20New%20York%2Dbased%20company,funding%20round%20earlier%20this%20year." target="_blank" rel="noopener">$35 billion in February 2021</a><a href="https://www.usnews.com/news/technology/articles/2021-04-12/software-maker-uipath-aims-for-nearly-26-billion-valuation-in-us-ipo#:~:text=The%20New%20York%2Dbased%20company,funding%20round%20earlier%20this%20year." target="_blank" rel="noopener">, which was more than three times the value of its previous financing round in July 2020. </a>It appears that the recent tech IPO weakness has negatively impacted the pricing of UiPath's IPO as the implied valuation of $25.8 billion represents nearly 26% haircut from its recent private market valuation of $35 billion.The average % YoY change in sales in 2020 [A] for the major enterprise software/platform stocks was 46.8% in 2020 and UiPath's sales growth was nearly double the comps' average. The average operating margin [B] of the major enterprise software/platform stocks was -14.6% in 2020, which was slightly lower than UiPath's operating margin of -18.2%. The combination of [A] and [B] for UiPath was 62.6%, which was nearly double the figure for average of the major enterprise software/platform stocks (32.2%).

UiPath Inc (PATH US) plans to complete its IPO in the coming days. The IPO price range is between $43 to $50 per share. The company is offering 6.81 million Class A shares in the IPO. The existing shareholders are offering 14.47 million Class A shares. At the high end of the IPO price of $50 per share, the total amount from the IPO proceeds would be $1.06 billion. After the IPO, there will be a total of 516.55 million Class A and Class B shares outstanding.At the high end of the IPO price range ($50 per share) the company could be valued at nearly $25.8 billion. This is below the company's recent private market valuation of $35 billion in February 2021, which was more than three times the value of its previous financing round in July 2020. It appears that the recent tech IPO weakness has negatively impacted the pricing of UiPath's IPO as the implied valuation of $25.8 billion represents nearly 26% haircut from its recent private market valuation of $35 billion.The average % YoY change in sales in 2020 [A] for the major enterprise software/platform stocks was 46.8% in 2020 and UiPath's sales growth was nearly double the comps' average. The average operating margin [B] of the major enterprise software/platform stocks was -14.6% in 2020, which was slightly lower than UiPath's operating margin of -18.2%. The combination of [A] and [B] for UiPath was 62.6%, which was nearly double the figure for average of the major enterprise software/platform stocks (32.2%). 

United States

Appian Corporation develops enterprise software solutions. The Company offers business process and cash management software. Appian serves customers worldwide.

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Appian Corp (APPN US)

UiPath IPO Valuation Analysis

Our base case valuation of UiPath is $60.7 per share, which represents a 21% upside from the high end of the IPO price range of $50 per share.

Douglas Kim

UiPath IPO Preview

UiPath Inc (PATH US) plans to complete its IPO in the coming days. At the high end of the IPO price range ($50 per share) the company could be...

Douglas Kim

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