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On Thursday, Evercore ISI adjusted its price target for UiPath Inc. (NYSE:PATH), reducing it to $12.00 from the previous $16.00, while retaining an In Line rating on the shares. According to InvestingPro data, UiPath maintains a GOOD overall financial health score, with particularly strong liquidity metrics. The revision came after UiPath reported its fourth-quarter results, which presented a mixed financial picture. The company’s Annual Recurring Revenue (ARR) grew by 14% to $1,666 million, slightly below the expectations of Evercore ISI and other market analysts, who had forecasted $1,673 million and $1,672 million, respectively. Revenue increased by 5% to $424 million, compared to the anticipated $426 million by Evercore ISI and $425 million by consensus.
UiPath’s operating margins were a positive surprise at 32%, exceeding the 24% expectation. The company maintains impressive gross profit margins of 83.38% and holds more cash than debt on its balance sheet, as revealed by InvestingPro analysis. However, management pointed to challenges within the public sector, a significant area of business for UiPath, where deal closures were postponed beyond the fourth quarter. The management cited ongoing public sector scrutiny and broader economic uncertainty as factors leading to more complex and extended deal cycles.
As a result of these delays, particularly in the Federal market, and the shift towards cloud-based services affecting revenue by approximately 2%, UiPath’s management has adopted a cautious stance in their guidance for the first quarter and the fiscal year 2026. This conservative outlook is currently reflected in after-market trading, where UiPath shares are experiencing downward pressure, having declined over 51% in the past year. Based on current market conditions, InvestingPro’s Fair Value analysis suggests the stock may be undervalued at current levels.
Despite these concerns, Evercore ISI acknowledged positive aspects of UiPath’s offerings, including its agentic roadmap and high AI attach rates among its large customer base, with over 85% adoption. Nevertheless, the lowered fiscal year 2026 outlook and lingering questions regarding the impact of AI on UiPath’s core Robotic Process Automation (RPA) business have created a challenging environment for the stock. Discover 8 additional exclusive InvestingPro Tips and comprehensive analysis in our detailed Pro Research Report, available with an InvestingPro subscription. Analysts predict that the stock will likely remain within a certain trading range until there is clearer visibility on UiPath’s strategy for monetizing its agentic technology, with a webinar scheduled for March 25, or until there is more confidence in the possibility of exceeding the current guidance.
In other recent news, UiPath Inc. reported its fourth-quarter earnings for fiscal year 2025, posting an earnings per share (EPS) of $0.26, which exceeded the forecasted $0.20. However, the company’s revenue for the quarter was $424 million, slightly missing the expected $425.27 million. Despite the EPS beat, the revenue miss led to a 15.89% drop in UiPath’s stock during aftermarket trading. The company also announced an annual revenue of $1.43 billion, marking a 9% increase year-over-year, with an Annual Recurring Revenue (ARR) growth of 14% to $1.666 billion. UiPath’s guidance for fiscal year 2026 projects revenue between $1.525 billion and $1.530 billion, with anticipated slower growth in the first half due to macroeconomic factors. In other developments, Mizuho (NYSE:MFG) Securities lowered its price target for UiPath to $12 from $14, maintaining a Neutral rating following the company’s revenue miss. The firm cited macroeconomic uncertainties and challenges in the public sector as contributing factors. Additionally, UiPath has been expanding its capabilities through artificial intelligence and strategic acquisitions, including the purchase of Peak AI, as part of its ongoing efforts to navigate the evolving technological landscape.
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