PATH: AI Partnerships Will Support Automation Gains While Competition Keeps Outlook Balanced

Analysts have modestly increased their fair value estimate for UiPath from approximately $15.93 to $16.40 per share, reflecting a slightly higher long term growth outlook supported by recent price target raises tied to AI driven product enhancements and partnerships, despite ongoing competitive pressures.

Analyst Commentary

Recent Street commentary reflects a cautiously constructive stance on UiPath, with modest target price increases framed by both optimism around AI driven automation and recognition of intense competitive dynamics.

Bullish Takeaways

Bullish analysts are nudging price targets higher, signaling incremental confidence that UiPath can deliver steadier growth and support a slightly richer valuation multiple over time.
New products and partnerships, including enhancements to orchestration capabilities, are viewed as strengthening UiPath's platform differentiation and long term revenue expansion potential.
Improving indicators across parts of the software landscape tied to AI are seen as a supportive backdrop for UiPath to capture greater automation budgets as enterprises prioritize AI enabled tools.
The willingness to raise targets ahead of key earnings checkpoints suggests expectations for solid execution, particularly in demonstrating that AI capabilities can translate into upsell and larger deal sizes.

Bearish Takeaways

Bearish analysts highlight that price target increases are modest, reinforcing the view that upside to the current valuation is limited without clear evidence of sustained re acceleration in growth.
Competitive intensity across automation and AI driven software remains a headwind, raising concerns about pricing pressure and the pace at which new offerings will contribute to top line performance.
The crowded nature of AI themed software trades introduces volatility and execution risk, with investors likely to rotate quickly if UiPath underdelivers relative to high expectations.
Several commentators stress that, while product updates are encouraging, the payback period on these investments may be lengthy, which could weigh on near term margin expansion and constrain multiple re rating.

What's in the News

UiPath outlined plans to pursue tuck in acquisitions while continuing opportunistic share repurchases, following the acquisition of Peak and emphasizing a strong cash position to fund M&A and buybacks (Key Developments)
New integrations with Talkdesk, Veeva, NVIDIA, Snowflake, and OpenAI expand UiPath's agentic automation footprint across contact centers, regulated software validation, high trust AI workloads, data driven decisioning, and ChatGPT enabled workflows (Key Developments)
UiPath issued fourth quarter fiscal 2026 revenue guidance of $462 million to $467 million, providing investors with updated expectations for near term growth (Key Developments)
Multiple product announcements, including expanded agentic automation offerings, UiPath Test Cloud enhancements, and AI augmented software testing tools, underscore the company's push to deepen its AI and automation platform capabilities (Key Developments)
UiPath launched a Conversational Agent with voice interaction via Google Gemini models, enabling natural language, speech based triggering and management of enterprise automations (Key Developments)

Valuation Changes

Fair Value Estimate has risen slightly from approximately $15.93 to $16.40 per share, reflecting a modestly stronger long term outlook.
Discount Rate has inched down from about 8.48 percent to 8.47 percent, implying a marginally lower perceived risk profile in the updated model.
Revenue Growth has increased modestly from roughly 8.49 percent to 8.76 percent, signaling slightly higher expected top line expansion.
Net Profit Margin has edged down from around 3.54 percent to 3.51 percent, indicating a small anticipated pressure on profitability.
Future P/E multiple has risen from about 139.9x to 145.1x, suggesting a somewhat richer valuation assumption on 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.

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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