UiPath (PATH): Evaluating Valuation Following Earnings Growth and New Partnerships with Tech Leaders

UiPath (NYSE:PATH) just wrapped up an earnings report that’s getting plenty of investor attention. The company didn’t just show revenue growth; it also delivered impressive gross margins thanks to rising adoption of its agentic automation platform. With UiPath doubling down on innovation and building partnerships with heavyweights like Microsoft, Amazon, and Salesforce, there is a real sense that it is carving out a durable space in automation.

This news comes as UiPath’s share price tells a mixed story. Over the past month, the stock is up by 10%, but zooming out to the year, it has dipped about 5%. That combination of short-term upside and longer-term stagnation suggests that sentiment may be shifting in response to UiPath’s latest moves, but the market still seems cautious. Successful new product introductions and deeper collaborations with tech giants are giving the company momentum, even if the stock’s longer-term track record has been choppy.

So, after this latest quarterly performance, is UiPath being overlooked at current prices, or is the market already baking in future growth prospects?

Most Popular Narrative: 8.2% Undervalued

The most widely followed view sees UiPath as undervalued compared to its calculated fair value. This discount is derived from long-term analyst projections and reflects a blend of optimism about automation’s future and caution around current financial uncertainty.

New product launches such as Agent Builder and Agentic Orchestration, along with strategic partnerships with Microsoft and Deloitte, are positioned to expand market opportunities and may increase 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. This could contribute to revenue growth and improved gross margins.

Want to know the financial engine behind this discount to fair value? The narrative’s fair value relies on ambitious growth in both earnings and profit margins, but assumes UiPath reaches levels usually associated with industry leaders. What are the specific targets and future multiples that give rise to such a bullish outlook? The full analyst consensus presents the bold numbers and exact forecasts backing that price.

Result: Fair Value of $13.30 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent macroeconomic uncertainty and delays in customer decision-making could undermine UiPath’s growth narrative, even with early adoption of new automation features.

Find out about the key risks to this UiPath narrative.

Another View: The SWS DCF Model

Taking a different approach, the SWS DCF model also points to UiPath being undervalued in today's market. Both methods see potential; however, could both really be right? What key factors might each be missing?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out UiPath for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own UiPath Narrative

If you see the story differently or want to dig into the numbers yourself, you can shape your own narrative in just a few minutes. Do it your way.

A great starting point for your UiPath research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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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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