UiPath (PATH) is set to continue recent trends like net new annual recurring revenue, or NNARR, stabilization and improved profitability despite debate around its role in an increasingly "agentic" automation world, RBC Capital Markets said in a note Tuesday.

Analysts, including Matthew Hedberg, said they met with UiPath's management following what they see as "solid" fiscal Q3 results. Their three key takeaways were that first, the management believes that UiPath today is fundamentally different from what it was years ago. Second, business trends appear to be stabilizing, and lastly, management is balancing growth with NNARR stabilized last quarter and GAAP profitability in fiscal Q3.

A major question from investors is whether UiPath is benefiting or being disrupted by generative artificial intelligence, or GenAI and agentic trends, the analysts said, adding that the management noted that UiPath is seeing increased customer adoption as companies progress through GenAI deployments.

In terms of competition, the management still primarily sees manual or homegrown solutions as its primary competition, followed by Microsoft (MSFT), with ServiceNow (NOW) and Salesforce (CRM) now showing up less frequently. "The bottom line is that management believes the market is large and expanding and believes their opportunity to win deals is elevated," the analysts said.

RBC raised its price target on UiPath to $19 from $16 and kept its sector perform rating.

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