UiPath: Execution Risks, Valuation Constraints, and AI Agent Disruption Drive Underperform (Sell) Rating

UiPath, the Technology sector company, was revisited by a Wall Street analyst today. Analyst Koji Ikeda from Bank of America Securities reiterated a Sell rating on the stock and has a $14.00 price target.

Koji Ikeda has given his Sell rating due to a combination of factors related to UiPath’s transition and competitive positioning. He believes the company still needs to prove it can successfully evolve from its legacy robotic process automation focus into a broader “agentic automation” platform that effectively connects traditional bots with AI agents across complex enterprise workflows. In his view, enterprises remain in early stages of AI adoption, so it may take many quarters before UiPath’s strategy visibly translates into stronger financial results, leaving investors with a long wait for clear validation. He also notes that the company’s valuation multiple has been revised downward to reflect more modest growth expectations, higher perceived risks, and a compression in peer group multiples, which limits upside potential from the current price.

Additionally, Ikeda highlights that while net-new annualized recurring revenue has recently shown signs of improvement after several weak quarters, this needs to strengthen further and sustainably to drive a more compelling reacceleration in overall ARR, and that depends heavily on successful execution of the new agentic automation vision. He projects that UiPath’s longer-term balance of growth and free cash flow, as measured by its Rule-of-33 profile, is only slightly better than the average of infrastructure software peers and does not stand out as either a high-growth or high-margin story, making the stock less attractive relative to alternatives. A key strategic risk he underscores is that AI agents might eventually handle most automation tasks on their own; if agents can reliably replicate what RPA bots do, the need for UiPath’s orchestration platform could be diminished over time. Taken together, the execution uncertainty, only modestly above-average financial profile, valuation constraints, and the risk of agents displacing RPA underpin his cautious Underperform (Sell) stance on the stock.