Last Update 25 Oct 25
Fair value Increased 2.05%UiPath’s analyst price target has been revised upward to $13 from $12.50, as analysts cite ongoing product innovation and new partnerships. This comes despite expectations of gradual top-line impact amid ongoing market competition.
Analyst Commentary
Analysts continue to assess UiPath's performance and outlook, revising price targets and highlighting key factors influencing their recommendations. These views reflect both ongoing optimism and caution regarding the company's future growth and competitive positioning.
Bullish Takeaways
- Bullish analysts point to ongoing product innovation, specifically citing updates to the Maestro orchestration platform as a catalyst for future revenue growth.
- New partnerships and product launches signal UiPath's commitment to expanding its technology suite and customer base.
- Recent quarter performance showed net new annual recurring revenue increasing by $30M, outpacing certain estimates and indicating momentum in core business operations.
Bearish Takeaways
- Bears caution that despite product enhancements, a highly competitive market environment may delay meaningful improvements to top-line growth.
- Net new annual recurring revenue, though above some estimates, still represents a 30% year-over-year decline, raising concerns about growth sustainability.
- While over 450 customers have adopted agentic capabilities, analysts believe it remains too early to predict meaningful automation-driven contributions to long-term forecasts.
What's in the News
- UiPath announced its recognition as a Leader in the Gartner Magic Quadrant for AI-Augmented Software Testing Tools. This highlights advancements such as AI-powered agents that enable more autonomous, adaptive, and efficient software testing across development cycles. (Key Developments)
- The company unveiled expanded offerings for its UiPath Platform, which include pre-built solutions, enhanced orchestration tools, new agent-building options, and industry-specific workflows. These offerings are aimed at accelerating enterprise agentic automation. (Key Developments)
- UiPath launched a Conversational Agent with voice interaction powered by Google’s Gemini models. This feature enables more natural, multilingual speech-based automation for business processes. (Key Developments)
- Collaborations with OpenAI, NVIDIA, and Snowflake are enabling new integrations that bring advanced generative AI, enhanced data processing, and agentic automation into enterprise workflows. These collaborations support innovation and productivity. (Key Developments)
- UiPath provided fiscal 2026 guidance, projecting revenue between $1.571 billion and $1.576 billion and annual recurring revenue in the range of $1.834 billion to $1.839 billion. (Key Developments)
Valuation Changes
- The Fair Value Estimate has increased slightly, moving from $13.44 to $13.71.
- The Discount Rate has declined marginally, from 8.45% to 8.43%.
- The Revenue Growth Projection has risen moderately, from 8.72% to 8.76%.
- The Net Profit Margin Forecast has decreased slightly, from 4.65% to 4.53%.
- The Future Price-to-Earnings (P/E) Ratio has increased, moving from 91.67x to 95.91x.
Key Takeaways
- 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.
- 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.
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