PATH: Partnerships And New AI Offerings Will Shape Automation Leadership Ahead

Analysts have modestly increased their price target for UiPath, raising it from approximately $13.71 to $13.86 per share. They cite recent product updates and ongoing developments in the AI and automation space as supportive factors for the adjustment.

Analyst Commentary

Recent Street research reflects a mix of optimism and caution regarding UiPath's near-term prospects, as evidenced by adjustments in price targets and shared observations on the company's execution and market positioning.

Bullish Takeaways

Bullish analysts have increased their price targets, citing product innovation and recent updates, especially to the Maestro orchestration platform, as drivers for potential long-term growth.
Checks for off-quarter earnings have shown improvement compared to prior periods, suggesting better execution during October and modest resilience amidst broader software market volatility.
UiPath’s customer base continues to adopt advanced automation and agentic capabilities, with the company highlighting the deployment of these solutions among more than 450 customers.
There is continued belief that investments in artificial intelligence and partnerships could help accelerate topline growth as these trends mature further.

Bearish Takeaways

Bearish analysts express concern over the intense competitive landscape, emphasizing that while product updates are positive, realizing their full impact on financial performance may take time.
Some reductions in price targets reflect a belief that near-term growth expectations should be moderated, particularly given a year-over-year decline in net new annual recurring revenue, despite exceeding internal estimates.
The software sector remains volatile due to the crowding effect in AI trades, resulting in increased scrutiny over UiPath’s ability to sustain accelerated growth within this environment.
Uncertainty remains around how quickly UiPath can translate its current innovations and customer wins into meaningful financial improvement, as competition for automation leadership intensifies.

What's in the News

UiPath became a founding technical contributor to the AIUC-1 security framework, helping set new standards for secure and compliant AI agent adoption in enterprises. (AIUC-1 announcement)
The company was recognized as a Leader in the Gartner Magic Quadrant for AI-Augmented Software Testing Tools, highlighting advancements in agentic AI testing capabilities. (Gartner recognition)
UiPath expanded its platform to offer more pre-built solutions, enhanced orchestration tools, and new agent-building capabilities. These changes are designed to accelerate agentic automation for enterprises. (Product announcements)
UiPath deepened AI partnerships with NVIDIA, Snowflake, and OpenAI to integrate enterprise-grade automation with advanced generative AI. This collaboration aims to create new capabilities for automating sensitive, data-driven business processes. (Partnership announcements)
UiPath issued updated guidance for the third quarter and fiscal year 2026, including projected revenue and annual recurring revenue growth. (Corporate guidance)

Valuation Changes

Consensus Analyst Price Target has risen slightly, moving from $13.71 to $13.86 per share.
Discount Rate has edged down marginally, decreasing from 8.47% to 8.43%.
Revenue Growth assumptions increased modestly, up from 8.76% to 8.77%.
Net Profit Margin expectations held nearly steady, slipping very slightly from 4.53% to 4.52%.
Future P/E ratio projections have risen marginally, moving from 96.0x to 96.9x, indicating a minor increase in valuation expectations.

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