Assessing UiPath After 37% Surge and New Automation Partnerships

If you are looking at UiPath and wondering if this is the moment to buy, sell, or simply hold tight, you are not alone. The stock closed recently at $16.28, and while it has dipped by 1.2% in the past week, its 30-day run is hard to ignore. The stock rocketed up 37.2% in just one month. Year-to-date, that's a 25.9% return for shareholders, and over the past year, UiPath has delivered a 28.8% gain. That kind of momentum is enough to catch anyone's attention, especially with a three-year return of 31.3% in the mix.

Much of this renewed optimism seems connected to UiPath's place at the center of automation trends driving both enterprise productivity and digital transformation. Recent news highlights growing partnerships and strategic investments as companies worldwide lean harder into automation to boost efficiency. These moves have bolstered long-term confidence in UiPath's business model, which helps explain the jump in investor enthusiasm reflected in the latest share price moves.

Of course, when share prices climb this rapidly, it begs the question: did the market get ahead of the fundamentals, or is there more upside? According to valuation checks, UiPath is currently undervalued in 3 out of 6 key metrics. That gives it a valuation score of 3, suggesting there could be reasons to take a closer look.

Next, let’s break down the main valuation approaches analysts use to assess UiPath. Keep reading for a perspective at the end that might offer an even clearer view of what the company is really worth.

UiPath delivered 28.8% returns over the last year. See how this stacks up to the rest of the Software industry.

Approach 1: UiPath Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) analysis estimates a company’s intrinsic value by projecting its future cash flows and discounting them back to today’s dollars. For UiPath, analysts rely on a 2 Stage Free Cash Flow to Equity model, which incorporates recent cash flow data and includes both analyst-driven and extrapolated growth for future years.

Currently, UiPath generates $318.9 Million in Free Cash Flow (FCF). Analyst estimates suggest that FCF will continue to grow steadily in the coming years, reaching $372.4 Million by 2026, $415.1 Million by 2027, and rising as high as $700.8 Million by 2035, based on long-term projections for the business.

By adding up these future annual cash flows and applying a discount rate, the DCF model calculates UiPath’s intrinsic fair value per share at $17.90. With shares recently trading at $16.28, this suggests the stock is about 9% undervalued relative to its projected cash generation.

Result: ABOUT RIGHT

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for UiPath.

Simply Wall St performs a valuation analysis on every stock in the world every day (check out UiPath's valuation analysis). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes.

Approach 2: UiPath Price vs Sales

For companies like UiPath that are scaling rapidly but have yet to achieve consistently strong profitability, the Price-to-Sales (PS) ratio is often the best valuation yardstick. The PS ratio compares a company’s market value to its revenue, making it especially useful for software and growth businesses where current profits might understate the underlying momentum.

A normal or fair PS ratio is influenced by expectations around future growth and how much risk investors are willing to accept. High-growth companies generally justify higher multiples, while more mature and slower-growers tend to see their PS ratios compress. Risk factors, such as competitive pressure or cash burn, act as a counterbalance and keep valuations in check.

UiPath’s current PS ratio stands at 5.78x. The industry average in software sits at 5.26x, while peers average 10.62x. These benchmarks show UiPath trading below its closest competitors but above the broader industry norm. Simply Wall St’s proprietary “Fair Ratio,” calculated at 6.96x, offers a more tailored benchmark. Unlike a basic industry or peer comparison, the Fair Ratio factors in UiPath’s unique growth trajectory, margins, market capitalization, and risk profile. This creates a more nuanced guidepost for valuation.

With UiPath’s PS ratio (5.78x) just a bit under its Fair Ratio (6.96x), the data suggests the market price is about in line with what’s reasonable for the company’s financial and growth prospects.

Result: ABOUT RIGHT

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your UiPath Narrative

Earlier, we mentioned there's an even better way to understand valuation. Let's introduce you to Narratives. A Narrative is a simple but powerful way to link your perspective about a company’s story, such as their growth drivers, business risks, or innovation, to a set of financial expectations and, ultimately, a fair value estimate.

Rather than just looking at static ratios or analyst targets, Narratives invite you to set your own forecasts for UiPath’s future earnings or profit margins, and then see how those stories translate into a fair value versus the current market price. They are accessible directly in the Community page on Simply Wall St, where millions of investors share and compare Narratives in real time.

Narratives help you decide when to buy, sell, or hold by showing how your assumptions stack up against others and whether the stock is undervalued or overvalued based on your distinct perspective. As new news or earnings reports emerge, Narratives automatically update to reflect the latest available data, helping you stay on top of changes as they happen.

For example, among investors tracking UiPath, the most optimistic Narrative sees a fair value of $17.0 per share, while the most cautious pegs it at just $11.71. This illustrates how differing stories can lead to different, but informed, investment decisions.

Do you think there's more to the story for UiPath? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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