11:52 AM EDT, 03/14/2024 (MT Newswires) -- UiPath ( PATH ) showed improvements in both revenue and profitability in recent quarters, but achieving sustained 20% annual recurring revenue growth seems unlikely, Morgan Stanley said in a note Thursday.

"The ability to sustain 20% ARR growth is likely key to the shares moving higher from current levels," Morgan Stanley added.

The firm said that although the company is performing adequately, net new ARR declined 9% year over year in Q4 to $86 million, which remains a main issue for UiPath ( PATH ).

UiPath's ( PATH ) Q4 revenue grew 31% year over year to $405.3 million due to strong revenue license and large spending customer growth and expectations for Q1 and fiscal 2025 remain ahead of consensus, according to the note.

Morgan Stanley raised the price target on UiPath ( PATH ) to $25 from $17 and reiterated its equal-weight rating.

The company shares were down 8.3% in recent trading.

Price: 22.40, Change: -2.03, Percent Change: -8.33