UiPath Stock Jumps 36% in Three Months: Time to Buy PATH?

UiPath Inc. PATH shares have surged 36% over the past three months, closely trailing the industry’s 40% growth. This rebound suggests a potential turning point after a difficult year.

The following analysis examines the company’s recent performance and evaluates whether PATH presents a compelling buying opportunity in today’s market environment.

Automation Boom Fuels PATH’s Momentum

UiPath remains a strong force in the booming Robotic Process Automation (RPA) market, which is poised for substantial expansion over the coming years. Its end-to-end automation platform positions the company to seize opportunities as demand for AI-driven solutions surges.

A critical driver of PATH’s success is its strategic alliances with top technology giants. Microsoft MSFT, Amazon AMZN, and Salesforce CRM continue to play pivotal roles in expanding UiPath’s reach and capabilities. These partnerships not only bolster PATH’s credibility but also integrate its offerings into broader enterprise ecosystems powered by Microsoft Azure, Amazon’s AWS and Salesforce Cloud solutions.

The company boasts high customer retention, with net retention rates ranging between 110% and 115%, underscoring its ability to expand usage within existing accounts. In the first quarter of fiscal 2026, UiPath reported a 6% increase in revenues year over year, reaching $357 million. Additionally, its annual recurring revenue rose 12% to $1.69 billion, reflecting the strength of its subscription-based business model and customer loyalty.

With a strong global presence, a robust partner ecosystem, particularly with Microsoft, Amazon, and Salesforce, and a continued focus on intelligent automation, UiPath is well-positioned to maintain its leadership in the evolving RPA and enterprise automation market.

PATH's Strong Financial Position

PATH boasts a robust financial position, highlighted by its strong balance sheet. As of the fiscal first quarter, the company held $1.6 billion in cash and equivalents, with no outstanding debt. This debt-free status ensures that its cash reserves are available to fuel growth initiatives and strategic investments. Such financial flexibility increases PATH’s ability to drive innovation and expand its market presence without financial strain.

Additionally, the company’s liquidity is robust. At the end of the fiscal first quarter, PATH reported a current ratio of 2.95, exceeding the industry average of 2.34. A current ratio above 1 indicates that a company has sufficient assets to cover its short-term liabilities. The company’s strong liquidity positions it to navigate economic uncertainties and enhances its capacity to capitalize on emerging opportunities in the competitive RPA market.

PATH’s Valuation Looks Attractive Relative to Industry Peers

PATH appears attractively valued compared to its industry counterparts based on the forward 12-month price-to-sales ratio. Currently trading at 4.43X, PATH sits notably below the industry average of 5.82X. This valuation gap signals a potential buying opportunity for investors seeking exposure to the automation and AI software space at a discount. The lower P/S multiple reflects lingering market skepticism or uncertainty, but it also leaves room for multiple expansion if the company delivers on growth expectations. As sentiment improves, PATH’s relative undervaluation may become increasingly difficult for investors to ignore.

Upbeat Analyst Sentiment for PATH

Over the past 60 days, PATH has experienced a notable wave of positive analyst sentiment. Seven analysts have raised their fiscal 2026 estimates, while six have upgraded projections for fiscal 2027, indicating growing confidence in the company’s mid-term growth or profitability outlook. In contrast, only one analyst downgraded each of the respective fiscal year estimates, underscoring a largely bullish consensus. Such momentum in estimate revisions often signals strengthening fundamentals and could act as a catalyst for further investor interest in the stock.

Final Take: Strong Buy Recommendation for PATH

Based on solid financials, rising revenues, growing analyst confidence, strong partnerships, and an attractive valuation, UiPath presents a compelling long-term investment opportunity. The company's leadership in automation and debt-free balance sheet offer a strong foundation for sustained growth. As market sentiment improves and AI adoption accelerates, PATH’s discounted valuation provides room for upside. Given these factors, the company earns a Strong Buy rating for investors seeking growth exposure in the AI and automation space.

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

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

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