UiPath Stock Plummets Amid Sudden Departure of CEO, Weak Sales Guidance

Shares of UiPath (PATH) lost nearly a third of their value in Thursday’s premarket session after the automation software company announced an unexpected CEO shakeup and provided current-quarter sales guidance that came in significantly below Wall Street estimates.

The company, which develops software that automates repetitive tasks and processes, said CEO Rob Enslin is stepping down on June 1 and will be replaced by co-founder Daniel Dines, who had resigned as co-CEO on Jan. 31. UiPath shares have fallen around 20% since Enslin assumed sole leadership.

Dines, who co-founded UiPath in 2005 with Marius Tirca, said he’s eager to lead the company again. “With this change, I’m excited to step back into the CEO role and I am looking forward to leading the company through our next phase of profitable growth and innovation,” Dines said in a statement released on Wednesday afternoon at the same time as the company’s quarterly results.

Macroeconomic Outlook, Leadership Transition Weigh on Sales Guidance

UiPath said it expects current-quarter revenue of $300 million to $305 million, with the top of that forecast coming in significantly below the $333 million expected by analysts.

For the full-year, the company downwardly revised its guidance, saying that it now expects net sales in the period of $1.405 billion to $1.410 billion, below its earlier forecast of between $1.555 billion and $1.560 billion.

“During the first quarter we saw increased deal scrutiny and lengthening sales cycles for large multi-year deals,” CFO Ashim Gupta said. “We have considered these factors, the current macroeconomic environment and our leadership transition in our updated guidance for the remainder of the year.”

Monitor If UiPath Stock Can Close Above This Key Level

Since reaching their current 2024 high in early February, UiPath shares have continued to track lower, with the price recently falling below the 200-day moving average (MA) to sit on a multi-month trendline leading into the company’s quarterly results. Moreover, the 50-day MA looks set to soon cross down below the 200-day MA to form an ominous death cross, a pattern that often confirms the start of a new downtrend.

Amid Thursday’s earnings-driven sell-off, investors might monitor if the stock can close above the $14 level, an area on the chart that finds support from a horizontal line extending back to the May 2022 swing low. An inability of buyers to defend this important level could see the shares retest their record low set at $10.40 in November 2022.

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As of the date this article was written, the author does not own any of the above securities.