PATH: AI Partnerships Will Drive Automation Hype Yet Leave Shares Vulnerable

UiPath's updated fair value estimate has risen to approximately $15.93 from $13.86, as analysts modestly lift price targets in response to new product launches, strategic partnerships, and expectations that the company can increasingly leverage AI trends, despite a still competitive market.

Analyst Commentary

Analysts remain measured on UiPath, modestly increasing price targets while keeping neutral ratings as they weigh improving product momentum against a still challenging competitive backdrop. The prevailing view is that the company is better positioned to capture AI driven automation demand, but must still prove that recent investments can translate into sustained, profitable growth.

Bullish Takeaways

Bullish analysts highlight the recent price target increases as a reflection of improving confidence that UiPath can participate in AI led software spending, even if upside is expected to be gradual.
New product launches, including enhancements to the Maestro orchestration platform, are seen as strengthening UiPath's automation stack and expanding its ability to drive higher value, end to end deployments over time.
Strategic partnerships and platform updates are viewed as incremental drivers that could support better revenue growth and operating leverage as customers standardize on UiPath for AI infused workflows.
Recent sector checks suggesting more resilient software demand, particularly around AI enabled solutions, support the view that UiPath's addressable market and long term growth runway remain intact.

Bearish Takeaways

Bearish analysts maintain neutral ratings, arguing that modest target hikes mainly reflect sector wide AI enthusiasm rather than clear, company specific inflection in fundamentals or execution.
The automation and AI software landscape is described as highly competitive, raising concerns that UiPath may need to sustain elevated investment levels, pressuring margins and delaying meaningful earnings expansion.
There is caution that newly announced products and partnerships could take considerable time to make a visible impact on top line momentum, leaving near term growth and valuation support dependent on broader AI sentiment.
Ongoing volatility in software names tied to crowded AI trades is seen as a risk to multiple stability, with some investors preferring clearer proof of durable, above peer growth before assigning a richer valuation to UiPath.

What's in the News

Joined the Veeva AI Partner Program to deliver agentic, end to end, paperless validation workflows for regulated software testing and quality management, integrating UiPath Test Manager with Veeva Validation Management for real time, audit ready traceability and compliance (company client announcement)
Became a founding technical contributor to AIUC 1, an enterprise security framework for AI agents, with independent third party audits and quarterly adversarial testing to validate UiPath's agentic AI controls and compliance posture (company client announcement)
Issued fourth quarter fiscal 2026 revenue guidance of 462 million dollars to 467 million dollars, providing updated expectations for top line performance as AI driven automation adoption scales (corporate guidance)
Expanded the UiPath Platform for agentic automation and orchestration with new pre built industry solutions, Maestro orchestration capabilities, agent building tools, document processing enhancements, and enterprise governance features, all available starting September 30, 2025 (product announcement)
Announced new strategic AI collaborations with NVIDIA, Snowflake, Google, and OpenAI to support high trust agentic automation, voice enabled conversational agents, and data driven AI workflows across regulated and large scale enterprise environments (company client and product announcements)

Valuation Changes

The fair value estimate has risen moderately from approximately 13.86 dollars to 15.93 dollars, reflecting a higher implied intrinsic value per share.
The discount rate has inched up slightly from about 8.43 percent to 8.48 percent, signaling a marginally higher required return on equity risk.
The revenue growth assumption has edged down slightly from roughly 8.77 percent to 8.49 percent, indicating a modestly more conservative top line outlook.
The net profit margin assumption has decreased meaningfully from about 4.52 percent to 3.54 percent, suggesting a more cautious view on long term profitability.
The future P/E multiple has increased significantly from approximately 96.9x to 139.9x, implying a higher valuation multiple on expected forward earnings.

Strategic partnerships and innovation in automation aim to boost growth through deeper customer relationships and expanded market opportunities.
Go-to-market restructuring and focus on AI-driven cloud products seek to enhance efficiency, customer engagement, and revenue growth.
Geopolitical and macroeconomic challenges are impacting UiPath's revenue growth, with FX headwinds and SaaS transition affecting financial targets and margins.

Catalysts

About UiPath

Provides an end-to-end automation platform that offers a range of robotic process automation (RPA) solutions primarily in the United States, Romania, the United Kingdom, the Netherlands, and internationally.What are the underlying business or industry changes driving this perspective?

UiPath's focus on accelerating innovation across the agentic automation road map is expected to grow deeper customer relationships and strategic partnerships, likely driving future revenue growth.
Increased adoption of UiPath's platform among existing customers, supported by strategic changes in the go-to-market structure, is aimed at enhancing customer engagement and boosting ARR growth.
The completion of go-to-market restructuring is anticipated to improve alignment and operational efficiency, which could lead to better net margins over time.
New product launches such as Agent Builder and Agentic Orchestration, along with strategic partnerships like with Microsoft and Deloitte, are positioned to expand market opportunities, potentially increasing earnings through higher-value deals.
UiPath's commitment to cloud offerings, with over $975 million in cloud ARR, positions the company to capitalize on AI-driven products and services, which could contribute to revenue growth and improved gross margins.

UiPath Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming UiPath's revenue will grow by 8.6% annually over the next 3 years.
Analysts are not forecasting that UiPath will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate UiPath's profit margin will increase from -4.7% to the average US Software industry of 13.1% in 3 years.
If UiPath's profit margin were to converge on the industry average, you could expect earnings to reach $243.6 million (and earnings per share of $0.5) by about September 2028, up from $-67.5 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 36.4x on those 2028 earnings, up from -86.2x today. This future PE is lower than the current PE for the US Software industry at 36.6x.
Analysts expect the number of shares outstanding to decline by 2.71% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.44%, as per the Simply Wall St company report.

UiPath Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The ongoing geopolitical climate and government transitions have caused delays in deal closures, impacting UiPath's ARR expectations and potentially affecting short-term revenue growth.
Increased macroeconomic volatility has introduced uncertainty around customer budgets, leading to a more cautious financial guidance for fiscal 2026, which could impact future earnings and revenue predictability.
Currency fluctuations (FX headwinds) have negatively affected revenue and ARR figures, creating additional challenges in meeting financial targets and impacting net margins.
The move towards a SaaS model has been identified as a 2% revenue growth headwind for the full year, implying potential pressures on net margins during the transition period.
While there is strong innovation in agentic products, these advancements may not significantly contribute to fiscal 2026 revenue, suggesting potential risks to short-term revenue projections despite long-term growth potential.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $14.147 for UiPath based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $17.0, and the most bearish reporting a price target of just $11.71.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.9 billion, earnings will come to $243.6 million, and it would be trading on a PE ratio of 36.4x, assuming you use a discount rate of 8.4%.
Given the current share price of $10.88, the analyst price target of $14.15 is 23.1% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Expanding Automation Partnerships And AI-Powered Agents Will Drive Business Momentum