Every investor in UiPath Inc. (NYSE:PATH) should know the most powerful shareholder groups. Institutions often own shares in larger companies, and we expect to see insiders owning a noticeable percentage of smaller ones. I like to see at least a little insider ownership. As Charlie Munger said “Show me the incentive and I’ll show you the result”.

UiPath has a market cap of US$10.0 billion, so it’s too big to fly under the radar. We expect institutions and retail investors to own part of the business. In the graph below, we can see that the institutions own shares in the company. We can zoom in on the different property groups, to learn more about UiPath.

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What does institutional ownership tell us about UiPath?

Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.

As you can see, institutional investors have a sizeable stake in UiPath. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see UiPath’s revenue and historical revenue below, but keep in mind there’s always more to tell.

UiPath does not belong to hedge funds. Looking at our data, we can see that the largest shareholder is CEO Daniel Dines with 20% of the shares outstanding. For context, the second shareholder owns approximately 9.7% of the outstanding shares, followed by a 6.9% ownership by the third shareholder.

We also observed that the top 6 shareholders represent more than half of the share register, with some small shareholders to balance the interests of the larger ones to some extent.

Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be obtained by studying the feelings of the analyst. There are plenty of analysts covering the stock, so it might be interesting to see what they are predicting as well.

Insider property of UiPath

The definition of an insider may differ slightly from country to country, but board members still matter. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.

I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own a reasonable proportion of UiPath Inc.. It has a market capitalization of just US$10.0 billion, and insiders have shares worth US$2.1 billion. US dollars in their own name. It is quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if these insiders have been buying or selling.

General public property

The general public, including retail investors, owns 17% of the company’s capital and therefore cannot be easily ignored. This size of ownership, although considerable, may not be sufficient to change company policy if the decision is not in line with other major shareholders.

Private equity ownership

With a 15% stake, private equity firms could influence UiPath’s board. This might appeal to some, because private equity is sometimes an activist who holds management accountable. But other times, the private equity sells off, after taking the company public.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand UiPath, we need to consider many other factors. For example, we found 4 warning signs for UiPath (1 is concerning!) that you should be aware of before investing here.

If you prefer to find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.