Technology Select Sector

Russell 2000

The Diluter

Comparable Companies - PATH

The report covers 140 insider sales totaling $109,329,202.57 over the last 12 months, with no discretionary purchases. Institutional ownership data is limited to partial quarterly flows and top holders from filings. Short interest data shows a latest settlement date of 2025-12-31 with 12.4% of float short.

CEO AND CHAIRMAN

COO & CFO

GC & CHIEF LEGAL OFFICER

CHIEF ACCOUNTING OFFICER

The filing reports beneficial ownership of 105,697,391 shares (19.9% of Class A Common Stock, 86.1% of total voting power). The shares are held via entities (IceVulcan Investments Ltd and Ice Vulcan Holding Limited). The filing notes that as of October 13, 2025, Mr. Dines no longer has voting or dispositive power over 240,000 shares of Class A Common Stock included in his prior ownership report.

The filing reports beneficial ownership of 10,222,937 shares (2.2% of Class A common stock). The filing states the securities were acquired and are held in the ordinary course of business and were not acquired for the purpose of or with the effect of changing or influencing the control of the issuer.

The filing reports beneficial ownership of 26,548,462 shares (5.6% of Class A common stock). The filing states the securities were acquired and are held in the ordinary course of business and were not acquired for the purpose of or with the effect of changing or influencing the control of the issuer.

The filing reports beneficial ownership of 47,754,958 shares (10.22% of Common Stock). The filing states the securities were acquired and are held in the ordinary course of business and were not acquired for the purpose of or with the effect of changing or influencing the control of the issuer.

Co-Founder, Chief Executive Officer, and Executive Chairman of the Board

Chief Financial Officer and Chief Operating Officer

General Counsel, Chief Legal Officer & Secretary

Independent Director

Daniel Dines

Ashim Gupta

Brad C. Brubaker

Philippe Botteri

Michael Gordon

Sivaramakichenane Somasegar

Daniel D. Springer

Karenann Terrell

Richard P. Wong

June Yang

Daniel Dines, as co-founder and long-standing CEO, has been central to UiPath's growth and strategic direction. His leadership has overseen significant revenue expansion and a transition from net losses to profitability. However, this growth has been accompanied by substantial share dilution, indicating a strategy that has prioritized expansion through equity issuance. His substantial ownership and control through Class B shares suggest a strong alignment with long-term company vision, but also raise considerations regarding shareholder influence. The company's capital allocation strategy has heavily featured share buybacks, though these have been significantly outpaced by stock issuances, pointing to a dilutive growth model.

Ashim Gupta's tenure as CFO and now CFO/COO at UiPath positions him as a key figure in the company's financial and operational execution. His experience spans critical periods of growth, including the company's public offering. While specific performance metrics tied directly to his tenure are not detailed in the provided documents, his continued progression within the executive team suggests a consistent contribution to the company's financial management and operational strategy. His role is integral to navigating the company's capital allocation decisions, including managing the impact of stock issuances and buybacks.

Brad C. Brubaker brings a wealth of legal and governance experience to UiPath, honed over a significant tenure at SAP. His role as General Counsel, Chief Legal Officer, and Secretary is critical for ensuring compliance, managing legal risks, and overseeing corporate governance practices. His background suggests a strong understanding of the complexities involved in public company operations and shareholder relations, which is essential for navigating capital allocation strategies and potential legal challenges. His long tenure at SAP indicates a consistent ability to manage legal frameworks within a large, global enterprise.

Philippe Botteri's background as a venture capital partner at Accel, with a focus on technology investments, brings valuable strategic insight to UiPath's board. His experience with early and growth-stage companies, coupled with his prior board service at Fiverr, suggests a strong understanding of scaling businesses and navigating public market dynamics. This expertise is crucial for evaluating UiPath's capital allocation strategies, particularly its approach to growth funding and potential M&A activities. His role as a board observer prior to becoming a director indicates a deep familiarity with the company's trajectory.

Michael Gordon's extensive financial and operational leadership experience, particularly his tenure as CFO/COO at MongoDB and his background in investment banking, provides UiPath's board with significant financial acumen. His expertise in guiding companies through growth phases and public market transitions is highly relevant to UiPath's capital allocation strategies, including managing its stock issuance and buyback programs. Gordon's ability to assess financial performance and market dynamics is critical for evaluating the effectiveness of the company's capital deployment and ensuring shareholder value. His role as Audit Committee Chair further underscores his focus on financial integrity and oversight.

Sivaramakichenane Somasegar's extensive background in technology leadership at Microsoft and his current role in venture capital at Madrona Ventures provide UiPath's board with a strong perspective on technological innovation and strategic growth. His experience in leading product development and R&D, coupled with his venture capital focus on early-stage companies, offers valuable insights into UiPath's product roadmap and market positioning. This expertise is crucial for evaluating the company's reinvestment strategies and the long-term potential of its capital allocation decisions, particularly in areas related to R&D and strategic acquisitions.

Daniel D. Springer's extensive experience as a CEO of public technology companies, including leading DocuSign and Responsys through significant growth phases and IPOs, provides UiPath's board with invaluable strategic leadership perspective. His proven ability to scale businesses and manage capital effectively is directly applicable to UiPath's ongoing capital allocation decisions, particularly in balancing growth investments with shareholder returns. Springer's expertise in sales, marketing, and overall management is crucial for assessing the strategic direction and operational efficiency of the company.

Karenann Terrell's extensive experience as a Chief Digital and Technology Officer and Chief Information Officer at major global corporations like GlaxoSmithKline and Walmart provides UiPath's board with critical insights into technology strategy and execution. Her leadership in digital transformation and large-scale IT management is highly relevant to UiPath's ongoing investment in its platform and infrastructure. Terrell's expertise can inform decisions regarding technology-related capital expenditures and the strategic integration of new technologies, ensuring that the company's investments align with its long-term growth objectives.

Richard P. Wong's dual experience as a General Partner at Accel and a former executive in the technology sector provides UiPath's board with a comprehensive understanding of both venture capital dynamics and operational execution. His role as Lead Independent Director and Chair of the Compensation Committee suggests a significant contribution to governance and executive compensation strategies. Wong's expertise in evaluating investment opportunities and guiding technology companies is highly relevant to UiPath's capital allocation decisions, particularly in assessing the strategic value of investments and potential M&A targets.

June Yang's extensive experience in cloud computing, AI, and machine learning at leading technology companies like Google Cloud and VMware provides UiPath's board with crucial insights into technological innovation and market trends. Her leadership in developing AI solutions and managing critical cloud infrastructure is highly relevant to UiPath's strategic investments in its platform and future product development. Yang's expertise can inform decisions regarding technology-driven capital allocation, ensuring that the company remains at the forefront of automation and AI advancements.

Appian delivers a low-code automation platform that enables organizations to design, automate, and optimize business processes and applications, focusing on rapid digital transformation.

The company operates as a single reportable segment, managing its business activities at the consolidated level.

Informatica provides an AI-powered end-to-end data management cloud platform, enabling enterprises to connect, manage, unify, govern, and secure data across multi-cloud and hybrid environments.

The company is managed, operated, and organized by major functional departments on a consolidated basis, operating as one reportable segment.

Wix provides a cloud-based web development platform that empowers users to create, manage, and grow a fully integrated digital presence through a SaaS model.

The company conducts business globally and is managed, operated, and organized by major functional departments that operate on a consolidated basis.

Dropbox is a global collaboration platform that provides solutions for creating, accessing, and sharing digital content, serving over 700 million registered users.

The company is managed and operated as a single reportable segment, with the chief operating decision maker using consolidated net income to assess performance.

UiPath's management team is led by a proven founder with a strong track record of scaling the business, supported by a board with deep financial and operational expertise. However, the capital allocation strategy is highly problematic, characterized by massive shareholder dilution (27.5% CAGR in shares) that offsets buyback efforts and erodes per-share value. While incentives are aligned through high insider ownership, the compensation structure lacks the long-term, non-financial metrics typical of a high-growth software company. The team is executing a strategic pivot to Agentic AI under returning leadership, but the financial engineering undermines the operational progress.

UiPath is subject to governmental export and import controls (Trade Controls) that could impair its ability to compete in international markets or subject it to liability if violated. The company must incur significant operational costs to support ongoing compliance with Trade Controls. Changes in its platform or products or future changes in Trade Controls may create delays in the introduction of its platform and products in international markets or prevent the export or import of its platform and products to certain countries, governments, or persons altogether.

As of January 31, 2025, UiPath had 3,868 full-time employees. The company is subject to local labor law requirements in all countries in which it operates and considers its employee relations to be good, having not experienced any work stoppages.

UiPath is subject to data privacy and security obligations, including the EU GDPR, U.K. GDPR, Brazil's LGPD, India's Digital Personal Data Protection Act, and China's PIPL, which impose strict requirements for processing personal data. Violations may result in material fines or private litigation. The company is also subject to the EU Digital Services Act (DSA), which requires changes to products, policies, and procedures, including enhanced content moderation practices and internal mechanisms to handle complaints. Failures to comply with DSA obligations may result in material fines.

UiPath sells to government entities and highly regulated organizations, which are subject to challenges and risks including stringent regulations, audits, and compliance requirements. The company is subject to anti-corruption, anti-bribery, and anti-money laundering laws, and noncompliance can subject it to criminal or civil liability. No specific responsible sourcing, audit, or community engagement programs were disclosed.

Revenue growth decelerated to 9.3% in FY 2025, though TTM growth has stabilized at 10.1% with operating margins turning positive. The company remains unprofitable on a GAAP basis due to high stock-based compensation.

The high IncrROIC suggests that recent incremental capital invested is generating high returns, likely driven by the margin expansion and operational efficiency improvements discussed in the transcripts. The reinvestment is primarily in R&D (Agentic platform) and sales capacity.

EV/Sales

Leadership in conceptualizing and developing our brand and business; software development expertise; extensive knowledge of our industry.

Global experience; financial expertise; software and technology industry and product experience; cloud computing experience.

Global experience; management experience; software and technology industry and product experience; cloud computing experience.

Experience as a public company CEO; financial expertise; software and technology industry and product experience; cloud computing experience; management experience; sales and marketing experience.

Broad IT and digital experiences spanning several industries.

Global experience; software and technology industry and product experience; cloud computing experience; management experience.

Daniel Dines (via Ice Vulcan Holding Limited)

Brad Brubaker

Hitesh Ramani

CEO: 5x annual base salary. Other executive officers: 2x annual base salary. Directors: 5x annual board retainer.

Daniel Solomon Dines

Held WACC (10.6%) and Terminal Multiple (20.0x EBITDA) constant, solved for Revenue Growth.

Balance Sheet - Supplemental

Balance Sheet

Cash Flow Statement - Supplemental

Cash Flow Statement

Income Statement - Supplemental

Income Statement

Ratios

Valuation

Historical Ratios & Multiples - PATH

The industry is experiencing a destructive capital cycle where peers are aggressively investing in AI (25% CapEx CAGR) while revenue growth (10.5% CAGR) fails to keep pace. While the demand for digital transformation is a tailwind, the increasing complexity of enterprise systems is leading to longer sales cycles and heightened deal scrutiny, particularly in the U.S. Public Sector.

UiPath is at a critical juncture following its inclusion in the S&P MidCap 400 and its first GAAP profitable quarter, making the next 12 months a 'show-me' period for its Agentic AI strategy.

Achievement of the first full year of GAAP profitability in FY 2026.
This would validate management's 'operational rigor' narrative and potentially reduce the market's skepticism regarding the company's high SBC expense.

Sustained net new ARR growth exceeding $100 million per quarter.
This would signal a successful re-acceleration of the business driven by Agentic AI adoption and cloud migration.

Shareholder dilution from stock-based compensation (SBC).
The mechanism is a persistent expansion of the share count (27.5% CAGR) that dilutes per-share earnings and book value, even if absolute net income improves.

Competitive displacement by Microsoft and Alphabet.
The risk is that larger tech giants integrate automation and AI agents directly into their productivity suites, commoditizing UiPath's standalone platform.

Liquidation value analysis is not relevant for the company's archetype ('Early-Stage_Hypergrowth') and was not performed.

Cash & Equivalents

Accounts Receivable

Inventory

Tax Assets

Short-Term Inv.

Other Current Assets

Net PP&E

Intangibles

Long-Term Inv.

Other Non-Current

Accounts Payable

Deferred Revenue

Other Current Liabilities

Non-Current Debt

Other Non-Current Liabilities

UiPath price target raised to $18 from $16 at Barclays

UiPath reported third quarter fiscal 2026 financial results with revenue of $411 million (up 16% YoY) and ARR of $1.782 billion (up 11% YoY).

UiPath reported Q2 fiscal 2026 financial results with revenue growth and increased ARR.

UiPath price target raised to $16 from $14 at Canaccord

UiPath announced Q4 and full year fiscal 2025 results with 5% YoY revenue growth in Q4.

UIPATH ACQUIRES PEAK TO LAUNCH VERTICALLY SPECIALIZED AGENTS WITHIN ITS AGENTIC AUTOMATION PLATFORM

Uipath Announces Fourth Quarter And Full Year Fiscal 2025 Financial Results Conference Call

UiPath reported Q2 fiscal 2025 results with 10% YoY revenue growth and expanded stock repurchase program.

Workforce reduction of approximately 10%

UiPath reported Q1 FY2025 results with 16% revenue growth and announced CEO transition.

UiPath reported record Q4 fiscal 2024 results, achieving first GAAP profit as a public company.

Amendment to Schedule 13G filing reporting ownership changes in UiPath Class A common stock.

Amendment to Schedule 13G filing by ARK Investment Management LLC showing reduced ownership position

UiPath reported Q3 FY2024 financial results with revenue growth of 24% year-over-year.

UiPath reported Q2 fiscal 2024 financial results with revenue growth of 19% year-over-year.

Amendment to Schedule 13G filing by ARK Investment Management LLC reporting ownership in UiPath

UiPath reported Q1 FY2024 financial results with revenue of $289.6 million, up 18% year-over-year.

UiPath reported Q4 and full year FY2023 results with record ARR growth of 30% YoY.

Amendments to company bylaws

UiPath reported Q3 FY2023 financial results with ARR of $1.110 billion, up 36% year-over-year.

Additional 6% workforce reduction and preliminary Q3 FY2023 results

UiPath reported Q2 fiscal 2023 results, surpassing $1 billion in ARR.

Workforce reduction of approximately 5%

Results of 2022 Annual Meeting of Stockholders

UiPath (PATH) Stock Price: $45 Target And Buy Rating

UiPath reported Q1 FY2023 financial results with ARR of $977.1 million, up 50% year-over-year.

UiPath (PATH) Stock: $32 Price Target And Overweight Rating

Unavailable

Change of independent auditor from Grant Thornton to KPMG

Executive leadership changes with Chris Weber appointed Chief Business Officer

UiPath reported Q2 FY2022 financial results with ARR of $726.5 million, up 60% year-over-year.

Q1 FY2022 financial results

Earnings Report: EPS Surprise N/A, Revenue Surprise N/A

UiPath price target lowered to $17 from $19 at RBC Capital

UiPath price target raised to $19 from $15 at Morgan Stanley

UiPath price target raised to $14 from $12 at Wells Fargo

UiPath resumed at Neutral from Sell at UBS

UiPath price target raised to $13 from $12.50 at BMO Capital

UiPath Inc. (PATH) PT Raised to $19 at RBC Capital

Situation: UiPath is attempting a high-stakes pivot from legacy Robotic Process Automation (RPA) to an Agentic AI platform under the leadership of returning founder Daniel Dines, while maintaining a fortress balance sheet with $805.4 million in net cash. Debate: The market is currently pricing in a successful 'Winner-Take-All' transition to AI orchestration, yet it is overlooking a structural collapse in revenue growth from 23.6% to 9.3% YoY and a destructive capital cycle where share count has expanded at a 27.5% CAGR. Conclusion: With a weighted fair value of $11.70, the stock is significantly overvalued; the combination of massive stock-based compensation (25.1% of revenue) and aggressive insider selling ($109.3 million in 12 months) suggests that the current price reflects peak hype rather than fundamental value.

Executive Summary

The primary value driver is the market's eventual re-rating of UiPath from a hypergrowth AI play to a maturing software entity facing structural headwinds. This correction will be catalyzed by continued revenue growth stagnation in the low teens, while the company's significant cash pile and 83.2% gross margins provide a distant but firm floor for the valuation.<ul><li>Driver: Structural growth deceleration and dilutive capital allocation.</li><li>Catalyst: Realization of GAAP unprofitability as stock-based compensation remains a persistent 25.1% of revenue.</li><li>Protection: A net cash position of $805.4 million and high gross margins of 83.2%.</li></ul>Our variant perception is that the market is excessively discounting the stock's structural risks due to a fixation on the Agentic AI narrative, failing to recognize that the underlying unit economics are being eroded by a 27.5% share count CAGR and that current cash burn is not a discretionary investment but a necessary cost to prevent obsolescence.This is a high-risk, venture-style investment in a disruptive technology, where the bet is on the company failing to achieve market leadership and future GAAP profitability at scale, which would invalidate the current premium valuation.

Core Investment Rationale

UiPath operates an end-to-end automation platform that has historically dominated the Robotic Process Automation (RPA) market with a 35.8% share. The business model is transitioning from traditional software licensing to a cloud-based subscription model, with Cloud ARR now exceeding $1.08 billion and growing over 25% YoY. The core strategy, led by returning CEO Daniel Dines, focuses on 'Agentic Automation,' which seeks to combine deterministic RPA with probabilistic AI agents (AgentBuilder) and centralized orchestration (Maestro). While the company maintains high gross margins of 83.2%, it has struggled with GAAP profitability, recording an operating loss of $162.6 million in FY 2025.Revenue generation is increasingly driven by large enterprise clients, with $100k+ ARR customers growing to 2,432. However, the company faces significant execution challenges in the U.S. Public Sector and a variable macroeconomic environment that has pressured deal cycles. The strategy relies on 'operational rigor' to expand non-GAAP margins, which reached 17% in Q2 FY 2026, though this is heavily supported by adding back $358.2 million in stock-based compensation.The company's strategic moat is built on its Data Scale Advantage, where its platform leverages millions of data points to improve automation accuracy, recently cited as improving a cybersecurity client's accuracy from 50% to 90%. Key intangible assets include the Agentic platform (AgentBuilder and Maestro) and specialized AI models like DocPATH and CommPATH. The company's physical asset base is minimal, with only $99.2 million in net PP&E, as it relies on a cloud-native stack using Kubernetes for scalability. The most significant tangible asset is the $879.6 million cash reserve, which provides the necessary runway for R&D investments that totaled $380.7 million in FY 2025.UiPath leads a fragmented RPA market with 35.8% share, significantly ahead of Automation Anywhere (9.7%) and SS&C Blue Prism (8.7%). However, the competitive landscape is shifting as tech giants like Microsoft (3.3% share) and Alphabet integrate automation into their broader ecosystems. The industry is currently in a 'Peak' capital cycle phase where CapEx growth of 25.0% is outpacing revenue growth of 10.5%, indicating aggressive capacity building that may lead to a supply glut. UiPath's 83.2% gross margin provides a premium over the peer median of 78.5%, but its 0.6% TTM operating margin lags the peer median of 7.6%, reflecting the high cost of defending its market position.UiPath's growth journey has reached a critical inflection point, moving from a 46.8% revenue growth rate in FY 2022 to a projected low-teens rate. The current situation is defined by the return of founder Daniel Dines as CEO in June 2024, following the resignation of Rob Enslin. This leadership shift coincided with a 34.04% stock price collapse on May 30, 2024, after the company lowered guidance due to execution failures and deal scrutiny.Materially, the company is navigating a transition to 'Agentic AI' while facing a securities class action lawsuit (dismissed in July 2025) that alleged misleading statements regarding its turnaround success. Despite achieving its first GAAP profitable quarter in Q3 FY 2026 with $13 million in operating income, the historical context is marred by a 216.3% increase in share count since 2021. The defining context for investors today is whether Dines can stabilize a go-to-market organization that has seen multiple leadership changes and workforce reductions (10% in July 2024) while fighting off commoditization from Microsoft.

Business & Situation

<ul><li>Bull Case: UiPath's dominant 35.8% RPA market share and its pivot to a $251 billion Agentic AI TAM provide a massive runway for growth. The company's fortress balance sheet with $805.4 million in net cash and high 83.2% gross margins support a successful transition to GAAP profitability as cloud ARR grows at 25% or more.</li><li>Bear Case: Structural revenue deceleration from 23.6% to 9.3% suggests the core RPA market is maturing or being commoditized by Microsoft. Massive shareholder dilution, evidenced by a 27.5% share count CAGR and stock-based compensation at 25.1% of revenue, erodes any potential per-share value creation.</li></ul>The consensus view is that UiPath is a 'Winner-Take-All' play in the automation space, where its legacy RPA footprint acts as a trojan horse for the high-margin Agentic AI era. Investors are currently rewarding the company for its first GAAP profitable quarter and its inclusion in the S&P MidCap 400, betting that the 950+ companies currently developing agents will drive a re-acceleration of ARR growth in FY 2027.Macro headwinds are viewed as temporary, with the expectation that the return of founder Daniel Dines will restore the 'innovation DNA' necessary to outpace larger competitors.The industry is experiencing a destructive capital cycle where peers are aggressively investing in AI (25% CapEx CAGR) while revenue growth (10.5% CAGR) fails to keep pace. While the demand for digital transformation is a tailwind, the increasing complexity of enterprise systems is leading to longer sales cycles and heightened deal scrutiny, particularly in the U.S. Public Sector.Our differentiated view is that the market is fixated on current cash flow while underestimating the long-term value destruction of the company's capital allocation. While management touts 'operational rigor,' the reality is a 27.5% CAGR in shares outstanding that has seen the share count explode from 168 million to 539 million. This dilution is not a 'discretionary investment' but a persistent cost of business, as evidenced by SBC representing 25.1% of revenue. Furthermore, the 140 insider sales totaling $109.3 million over the last 12 months, with zero discretionary purchases, reveal that those with the most information do not believe the stock is undervalued at $14.34. The governance friction caused by Dines' 86.1% voting power prevents any external pressure to rationalize this dilutive behavior, making the stock a 'value trap' where operational gains are captured by employees rather than shareholders.The debate between AI potential and dilutive reality favors the latter. At 4.5x EV/Sales, the market is paying a premium for a company whose revenue growth has stalled in the single digits (9.3% in FY 2025) and whose per-share metrics are being systematically dismantled. The $11.70 valuation target reflects a necessary re-rating to align with its maturing growth profile and high dilution risk.Our analytical edge is a focus on underlying unit economics and customer cohort data, which indicates that while gross margins are high, the path to genuine GAAP profitability is being obscured by the market's simplistic focus on non-GAAP 'adjusted' metrics that ignore the massive equity cost of the business.

Core Thesis

Daniel Dines, the co-founder and CEO, has a 20-year track record of scaling UiPath from a small Romanian startup to a global leader with $1.43 billion in revenue. However, his tenure has been marked by extreme shareholder dilution, with the share count increasing 216.3% since 2021. His return to the CEO role in June 2024 followed a period of execution challenges under Rob Enslin, and while he has stabilized the narrative around Agentic AI, he has yet to prove he can drive GAAP-profitable growth without relying on massive equity issuance.Capital allocation skill is weak and dilutive. Management has used $712.1 million in stock issuance to fund $811.1 million in buybacks, effectively 'buying high and selling low' as the average issuance price was $32.80 while buybacks occurred at $16.71. This strategy has resulted in a net share count CAGR of 27.5%, destroying per-share value despite generating $305.6 million in free cash flow.Management credibility is mixed. While they have been candid about execution errors in sales compensation and macro headwinds, the systematic insider selling ($109.3 million in 12 months) contradicts their public optimism regarding the Agentic AI turnaround.<ul><li>Board Independence: 77.8% (7 of 9 directors)</li><li>Chairman/CEO Roles: Combined (Daniel Dines)</li><li>Chairman Tenure: 20 years</li><li>Insider Ownership: 23.19% (87.0% Voting Power)</li><li>Shareholder Rights: Declassified Board, Majority Voting, Dual-Class Stock</li></ul>The stewardship verdict is poor due to the dual-class share structure that grants Daniel Dines 86.1% of the voting power, effectively insulating management from shareholder accountability. The governance outcome tree is limited: 1. Status Quo: Dines continues the current dilutive path, 2. Strategic Pivot: A successful AI transition that offsets dilution (low probability), 3. Strategic Review: Unlikely given the voting control. The current structure ensures that 'value drift' will persist as long as SBC remains the primary funding mechanism for operations.

Leadership & Governance

The valuation floor is set at $5.93, representing the Bear Case DCF scenario value. This serves as the ultimate backstop in a 'broken growth' scenario where the Agentic AI transition fails to materialize and revenue growth collapses below 5%.The base case assumes revenue growth stabilizes at 10.4% CAGR through Year 5, with operating margins reaching 19% as cloud scaling provides leverage. This scenario assumes successful Agentic AI adoption but is tempered by a 10% discount to sector multiples due to persistent SBC dilution.The bull case assumes rapid Agentic AI adoption drives 25%+ cloud ARR growth and premium pricing, leading to a $16.72 Blue-Sky Potential. This assumes revenue growth is 400 bps higher than the base case and exit multiples reach 22.0x EBITDA.The bear case is defined by a scenario of execution failure, such as failing to reach scale or achieve profitability in the Agentic AI segment. In this scenario, revenue growth falls below 5% and margins remain negative through Year 5, resulting in a floor value of $5.93.

Valuation Context

<ul><li>Achievement of the first full year of GAAP profitability in FY 2026.
This would validate management's 'operational rigor' narrative and potentially reduce the market's skepticism regarding the company's high SBC expense.</li><li>Sustained net new ARR growth exceeding $100 million per quarter.
This would signal a successful re-acceleration of the business driven by Agentic AI adoption and cloud migration.</li></ul>UiPath is at a critical juncture following its inclusion in the S&P MidCap 400 and its first GAAP profitable quarter, making the next 12 months a 'show-me' period for its Agentic AI strategy.

Catalyst Path & Context

<ul><li>Shareholder dilution from stock-based compensation (SBC).
The mechanism is a persistent expansion of the share count (27.5% CAGR) that dilutes per-share earnings and book value, even if absolute net income improves. SBC represented 25.1% of revenue in FY 2025, and the company issued $712.1 million in stock over the last five years.</li><li>Competitive displacement by Microsoft and Alphabet.
The risk is that larger tech giants integrate automation and AI agents directly into their productivity suites, commoditizing UiPath's standalone platform. Microsoft currently holds a 3.3% share in RPA but is aggressively expanding its Power Automate and Copilot offerings.</li></ul>

Primary Risks

<ul><li>Entry Target: Not applicable for a Sell recommendation.</li><li>Stop Loss: Not applicable for a Sell recommendation.</li><li>Position Size: Sizing is set to 'None' as the current valuation of $14.34 offers a -18.4% expected return relative to our $11.70 fair value target, making the risk-reward profile unattractive for new or existing positions.</li><li>Time Horizon: Not applicable for a Sell recommendation.</li></ul><ul><li>SBC as a percentage of revenue</li><li>Net new ARR growth rates</li><li>Insider trading activity (specifically any discretionary purchases)</li></ul>The 'killer' is unexplained revenue deceleration. If growth slows significantly without a corresponding improvement in GAAP profitability, the 'Hypergrowth' premium will evaporate entirely.

Actionable Parameters & Monitoring

UiPath is a company whose operational progress in Agentic AI is being systematically undermined by a destructive capital cycle and massive shareholder dilution. While the fortress balance sheet and high gross margins provide some stability, the 27.5% share count CAGR and aggressive insider selling suggest that the stock is a value trap at current levels. We recommend a Sell with a valuation target of $11.70, representing a -18.4% expected return.

Final Conclusion

Structural growth deceleration and dilutive capital allocation.

Driver

Realization of GAAP unprofitability as stock-based compensation remains a persistent 25.1% of revenue.

Catalyst

A net cash position of $805.4 million and high gross margins of 83.2%.

Protection

UiPath's dominant 35.8% RPA market share and its pivot to a $251 billion Agentic AI TAM provide a massive runway for growth. The company's fortress balance sheet with $805.4 million in net cash and high 83.2% gross margins support a successful transition to GAAP profitability as cloud ARR grows at 25% or more.

Bull Case

Structural revenue deceleration from 23.6% to 9.3% suggests the core RPA market is maturing or being commoditized by Microsoft. Massive shareholder dilution, evidenced by a 27.5% share count CAGR and stock-based compensation at 25.1% of revenue, erodes any potential per-share value creation.

Bear Case

Situation: UiPath is attempting a high-stakes pivot from legacy Robotic Process Automation (RPA) to an Agentic AI platform under the leadership of returning founder Daniel Dines, while maintaining a fortress balance sheet with $805.4 million in net cash. Debate: The market is currently pricing in a successful 'Winner-Take-All' transition to AI orchestration, yet it is overlooking a structural collapse in revenue growth from 23.6% to 9.3% YoY and a destructive capital cycle where share count has expanded at a 27.5% CAGR. Conclusion: With a weighted fair value of $11.70, the stock is significantly overvalued; the combination of massive stock-based compensation (25.1% of revenue) and aggressive insider selling ($109.3 million in 12 months) suggests that the current price reflects peak hype rather than fundamental value.

The strategy has evolved from a period of execution challenges and macro headwinds in early FY2025 to a disciplined pivot toward 'Agentic Automation' and profitability by FY2026. The narrative shifted from stabilizing the core RPA business and fixing go-to-market execution (Q1 FY25) to aggressively integrating deterministic automation with probabilistic AI agents (Q3 FY25), culminating in a unified platform strategy that emphasizes platform stickiness and operational rigor to drive GAAP profitability.

Method	Implied Value	Weight	Weighted Value
DCF	$12.19	40%	$4.88
Comps	$11.37	60%	$6.82
Total Weighted			$11.70

PATH

Price History

Key Metrics

Recent Activity

Valuation Table