UiPath Inc has been given a "sell" rating by UBS due to competitive challenges and a difficult market environment that could impede growth.

The company faces increased competition from major players such as Microsoft and ServiceNow, who are incorporating automation features into their software offerings. Furthermore, the emergence of AI startups and large language model providers poses a threat to UiPath's market position.

Customer growth for UiPath has been stagnant since late 2022, particularly after the launch of ChatGPT. UBS reports that there has been no improvement in net retention rates and execution gains following recent organizational changes. Experts consulted by UBS have expressed doubts about the growth potential of the robotic process automation (RPA) market.

UBS predicts that UiPath's annual recurring revenue growth will fall short of market expectations until 2026, with additional downside risks. UBS has set a price target of $14 for UiPath, significantly lower than its current trading range, reflecting concerns about the company's ability to attract new enterprise customers in a market that increasingly favors consolidated vendor solutions.