UiPath
UiPath is an RPA (robotic process automation) company that is strongly integrating language models into its product. Their recent developments have focused on Agentic Orchestration. Unlike traditional automations that follow a linear script, agents use LLMs to reason through ambiguity. However, an LLM agent alone is limited. UiPath provides the glue and the compass, the “Maestro” layer—that gives agents the data, instructions, connections, and tools they need to start working for a variety of companies.
Language models combine very well with the traditional deterministic method of software robotics. Deterministic RPA can be stiff and unforgiving when the underlying interface changes. Automation based purely on statistical models will also be hard to manage in most situations.
In the market there seems to be failure to confidently understand the current state of AI, and what that means for a company like UiPath. There is no general AI, and I believe companies like OpenAI will never make general AI. What there is now, no more no less, are powerful language models, which combined with well-designed control loops allow greater levels of software automation than before. In my view, UiPath stands to benefit greatly, and if language models do not prove that useful then at least the RPA business of UiPath goes undisrupted.
I predict that the orchestration capabilities of UiPath’s software will be more and more in demand as companies start automating processes with GenAI. Separating these tasks clearly is more transparent, maintainable, and robust than trying to have a single agent do this. Or rather, this is what that poor single agent would be doing anyway under the hood, but the result would be much more like an unreliable black box than with UiPath. This is the main reason why UiPath will look very good for companies who want to adopt agentic workflows, and the growth potential from this seems to be totally mispriced in PATH’s current valuation.
Competition
UiPath is already a decently well-established business with a strong balance sheet having $1.47 billion in cash with effectively no debt, generating $350 million in free cash flow annually at a 21% FCF margin. That is to say that the typical risks of growth companies like profitability and debt are small. Then if my belief is correct that the agentic use of language models will generate a lot of growth, the biggest hurdle should be competition.
Why not just use Python?
I am not a professional developer but I do a decent amount of coding both during work and leisure. I have programmed an LLM interface and some agentic functionality for it to use for my own purposes. Doing this at enterprise level would feel like a big task. Help with things like compliance, human-in-the-loop, pipeline design, and agent management would seem worth some budgeting.
Python has libraries to help with orchestration and probably in some cases this approach can be optimal, but in many cases as with institutions such as banks and hospitals, the orchestration, compliance, and exception handling features of UiPath should pay off. UiPath has a centralized dashboard where every task done by an AI agent is logged, reversible, and guided by given policy; a similar thing would require a lot of work starting from scratch. The already-existing-from-RPA-times auditing and control capabilities of UiPath will be well utilized in agentic automation.
Microsoft
As a computer user I will always take the chance to say I do not like Microsoft or most of their software. As is the fashion currently, Microsoft is strongly developing AI, but as a reluctant everyday user of their Office software I have yet to see much benefit.
Their cloud and language model service is another thing, but currently their agentic orchestration capabilities seem lacking. Their primary play, Copilot Studio, lives largely inside the Microsoft 365 environment.
Palantir
Although the companies’ focus is different, I think they might in some cases be used for a similar purpose: integrating AI into company processes.
In any case, adopting Palantir is a big investment, requiring a strong conviction of direction for the company’s data systems. UiPath’s weight is lighter; it can be deployed department-by-department to automate specific manual tasks. As such they should compete differently for the most part.
Other RPA shops and agentic startups
There are numerous other RPA companies like Blue Prism or Automation Anywhere. UiPath was already a leader in RPA, and they have had the strongest push for Agentic AI, having a defined lead now in the agentic orchestration department.
No doubt there are many agentic startups and such. I believe UiPath’s orchestration and control mechanisms are a considerable moat over these for now. UiPath is also in a position to acquire suitable ones in this class, as they have done with Peak (March 2025, adding vertically specialized agents for retail and manufacturing) and WorkFusion (February 2026, bolstering financial services compliance and fraud detection).
Valuation
As of 26.5.2026 the stock trades at $11.72, well off a 52-week high of $19.84, with shorted shares at 31.8% of float.
| Metric | Value |
|---|---|
| Stock price | $11.72 |
| 52-week low / high | $9.20 / $19.84 |
| P/E (trailing) | 19.5x |
| P/E (forward) | 13.0x |
| EV/Revenue | 2.9x |
| P/FCF | 17.2x |
| PEG | 0.40 |
| Short % of float | 31.8% |
| Analyst target (mean) | $13.50 |
UiPath recently turned profitable—Q1 FY2027 was its first-ever GAAP profitable first quarter, with $28 million in operating income. Marketing and R&D costs are still proportionally higher than what they probably will be in the future, so the forward P/E of 13x gives a more representative picture than the trailing one. On a cash-flow basis the multiple looks even more reasonable: $6.1 billion market cap against $350 million in annual free cash flow puts P/FCF at roughly 17x, not expensive for a business growing revenue at 17%.
Running a reverse DCF at a 9.4% WACC, the current share price implies only about 4.7% annual FCF growth indefinitely. That is a remarkably conservative assumption for a company at the center of the agentic automation buildout. If UiPath captures even a modest share of the expected market expansion, the growth rate embedded in the price should prove too pessimistic. Worth noting also that management has beaten its own guidance in each of the past five consecutive quarters—a pattern that suggests these conservative assumptions are understating what the business actually delivers.
One number worth keeping track of: stock-based compensation runs at $290 million per year. The company is also buying back $330 million annually, so the net capital return is real, but the SBC drag reduces the effective yield to shareholders more than the buyback headline suggests.
The high short interest (31.8%) suggests the market is aggressively betting that GenAI will cannibalize RPA. Not likely; rather, I think GenAI will best be applied in the framework that UiPath has already been developing for RPA. Borrowing rates remain low for shorters, so there is no obvious short squeeze or anything but if UiPath continues to succeed then the eventual closing of some of these shorts will become an additional headwind.
Growth
The case here is simple to say: agentic automation opens a new and unprecedented demand for orchestration software where UiPath is a leader. This has the potential to cause very strong growth for UiPath.
Q1 FY2027 added some concrete confirmation to the thesis. Revenue came in at $418 million, up 17% year-over-year. Annual Recurring Revenue grew 12% to $1.9 billion. Notably, 16 out of the top 20 deals in the quarter included AI features, suggesting the agentic shift is not hypothetical but showing up in the order book. Management raised full-year guidance to approximately $1.78 billion in revenue and $425 million in free cash flow. Net retention rate reached 109%, up from 107% in each of the prior three quarters—meaning existing enterprise customers are expanding their automation spend faster than any are churning. The installed base is growing from within, not just from new logos.
Big tech capex into AI is beneficial to UiPath. As LLMs become cheaper and more capable so do the automations facilitated by UiPath. The main growth thesis strongly rests on UiPath benefiting from, and being the platform that companies start deploying their agentic automations on.
Risks
In my opinion, the biggest risk here is execution and marketing. UiPath is in a good position to capitalize on the agentic automation market, but execution can always fail somewhere.
Although current AI development is in my opinion only beneficial to UiPath, if companies like Anthropic switched their focus more into the orchestration and automation side of things then in that case they would start competing with UiPath for the same customers.
Another risk could be overall stagnation of AI development and adoption. Current LLMs are already useful, and the adoption part is lacking, so immediate growth is not limited by this in my opinion. Ever-advancing AI can provide more and more opportunities for automations, but even with current tech there is already a lot to be done.
One number deserves close attention going forward: ARR grew 12% year-over-year in Q1 FY2027, while total revenue grew 17%. ARR is the more forward-looking of the two—it tells you what is contracted and recurring, not what was recognized. Twelve percent is not alarming, but if the gap between revenue growth and ARR growth persists or widens, it would raise questions about whether the revenue acceleration is compounding subscription expansion or front-loaded deal structures. The agentic thesis needs ARR to pick up, not just headline revenue.
There is also a leadership elementc to consider. CEO Daniel Dines stepped back in early 2024 and let Rob Enslin run the company as sole CEO, only for Enslin to resign in June 2024 after four months on the job. Dines returned the same day. The company has performed well since then, but the episode was a shock—the stock dropped over 30% on the news. Personally, I don’t think this is currently a big risk, to me Daniel Dines seems like technically competent CEO who understands LLMs and their potential in automation, and he seems motivated now. I think he is important for UiPaths current journey and it could be bad if he were to repeat his previous step back it, so the risk must be aknowledged. Funnily enough, UiPaths stock price seems react relatively strongly to the CEOs routine stock sales. This I’m sure is just him realizing some of his vast wealth tied in UiPath to fund his general life. He continues to hold large a position, and with his current networth already being very high it’s probably more important to get to enjoy it rather than to realize all of it at an optimal price.
Finally, delayed or smaller than expected overall adoption of agentic automations can delay or diminish the expected growth and revenues from this segment. Interest and uses for agentic automations seem undeniable, and UiPath’s balance sheet will not be bothered by delays, so this risk on its own is not very harmful.
Disclaimer
The author has a long position in UiPath. This article is not investment advice.