UiPath Stock Appears Undervalued Based on Forward P/S Ratio

UiPath Inc. PATH appears attractively valued compared with its industry peers based on the forward 12-month price-to-sales (P/S) ratio. Currently trading at 4.37x, PATH’s valuation falls short of the industry average of 5.68x, suggesting the stock may offer a relative bargain for growth-focused investors. As a leader in robotic process automation, UiPath has continued to expand its enterprise footprint, with growing adoption across finance, healthcare and logistics sectors.

Despite macroeconomic uncertainty, the company has maintained solid top-line performance, driven by a combination of strong recurring revenues and international expansion. The lower P/S ratio reflects market caution, possibly tied to concerns about profitability or broader tech-sector volatility. However, for long-term investors, PATH’s product breadth, developer ecosystem and recurring revenue model could warrant a re-evaluation of its current discounted valuation.

The company's investments in AI-powered automation and integrations with major platforms like Microsoft and SAP enhance its long-term relevance. As digital transformation continues to be a strategic priority for enterprises, UiPath remains well-positioned to benefit from secular demand trends, even if short-term sentiment remains cautious.

PATH vs. Peers: Valuation and Market Position

Compared with peers like ServiceNow NOW and Pegasystems PEGA, UiPath’s valuation looks modest. ServiceNow trades at a significantly higher forward P/S multiple due to its broad enterprise suite and consistent profitability. Still, PATH’s 4.37x ratio offers a more accessible entry point for investors seeking RPA exposure.

Pegasystems, another player in the automation and customer engagement software space, also trades at a higher P/S ratio than PATH. While PEGA benefits from strong client relationships, PATH’s faster revenue growth and deeper automation focus could support stronger long-term upside, highlighting its relative value in the enterprise software landscape.

PATH currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

This article originally published on Zacks Investment Research (zacks.com).

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