Robotic process automation technology company Blue Prism (PRSM:AIM) fell to its lowest level in more than a year after toning down growth guidance.
Shares in the Warrington-based company fell 5% to £10.23 after reporting a soft annual recurring revenue run rate for the six months to 30 April.
Annual recurring revenue was approximately £168 million, versus £154 million at the end of October 2020, which means revenues are likely to be towards the lower end of the £170 million to £180 million range previously guided.
Guidance remained unchanged for losses, which are still expected to come in at around a £25 million loss this year.
Blue Prism’s stock has plunged more than 40% in 2021 versus a 7% rally for the FTSE All-Share index. The share price last traded at similar levels in April 2020. The stock went close to £18 as recently as February this year.
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Robotic process automation, RPA for short, uses a virtual taskforce to automate manual back-office administration. This cuts costs for clients, frees the human workforce to do more value-added tasks, improves customer service and speed, and reduces the need to invest in new IT systems, all via a compliance-friendly platform.
The RPA market is predicted to see enormous growth in future. It was estimated to be worth around $1.9 billion in 2019 but a report earlier this by Global Market Insights predicted it to surge beyond $23 billion by 2026.
Analysts are starting to wonder if competition is starting to hurt Blue Prism’s growth. Privately-owned Automation Anywhere and UiPath, which listed on Wall Street last month, are the big specialist peers in the RPA market, but Microsoft and others are starting to move into the space.
‘Blue Prism is trading at circa 5.1-times forward looking enterprise value to sales, which compares to a 39.9 multiple for US peer UiPath,’ pointed out Megabuyte analyst Cameron Naylor.
