Catalyst
- UiPath is built fully around AI, and it sits right between the first and second stages of the AI boom. The first stage focused on building the hardware that makes AI possible. Companies like Nvidia and Micron supplied the chips, memory and data centres that power modern models. That phase created huge profits for those who spotted it early. Now we are entering the second stage where AI becomes part of everyday work. This is where UiPath fits in.
- UiPath’s platform helps businesses automate routine digital tasks such as processing invoices, entering data and connecting systems that do not normally work together. What makes it special is that it can work across almost any software, even legacy programs, using its AI computer vision. The system can see what is on a screen and take action, just like a person would. These challenging integration processes can create strong moat for them as one of the early leader in the space.
- Its latest features like Autopilot let users describe what they want in plain English, and the software builds the automation automatically. This means AI is no longer just answering questions but actually doing the work.
- UiPath already serves more than half of the Fortune 500, has strong recurring revenue and is expanding its partnerships with major cloud providers. The company recently launched collaborations with OpenAI and NVIDIA to enhance agentic automation in enterprise workflows. If it continues to execute well, it could become a key platform for how businesses use AI to get real work done.
Valuation
- At under $10B valuation, I see this stock has a long runway ahead of them.
- Conservative valuation: 10% revenue growth over 5 years with 20% profit margin and a 30x multiple still show significant undervalued.
Risks
- UiPath faces heavy competition from large tech companies like Microsoft and ServiceNow that are adding similar automation tools into their products. If customers choose those built-in options, UiPath could lose some market share.
- The company also needs to keep improving quickly. Turning simple automation into fully intelligent digital workers takes time and may not generate immediate revenue.
- Finally, the stock price already reflects high expectations. If growth slows or new AI products do not gain traction as fast as expected, the market could react negatively.
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Disclaimer
QuanD is an employee of Simply Wall St, but has written this narrative in their capacity as an individual investor. QuanD holds no position in NYSE:PATH. 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. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimate's are estimations only, and does 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 the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
