UiPath (PATH) has seen its stock hit an all-time low following a bleak revenue forecast issued as a part of its Q4 FY 2025 financial results. The company’s financial outlook has been negatively impacted by anticipated federal spending cuts and broader global economic uncertainties, particularly in the U.S. public sector. In its recent earnings report, UiPath projected revenue for the upcoming fiscal quarter far below analyst expectations, citing these macroeconomic pressures. Despite recording a year-over-year revenue increase for fiscal 2025, the company’s prospects for 2026 appear doubtful, evidenced by a downgrade in stock ratings from several analysts. UiPath’s strategy to address these hurdles includes focusing on operational efficiency and expanding AI capabilities, as demonstrated by its acquisition of Peak AI Limited. However, questions remain about the company’s growth sustainability amid competitive and economic challenges.
Solid Results but Soft Forward Guidance
UiPath is developing AI technology that emulates human intelligence, greatly enhancing business operational efficiency. The UiPath Platform plays a critical role in ushering in an era of agentic automation, promoting seamless integration among agents, robots, people, and models. This integration facilitates the formation of autonomous processes and more intelligent decision-making frameworks.
The company recently announced the acquisition of Peak AI Limited, aiming to enhance AI adoption in various sectors by integrating Peak’s capabilities with the UiPath platform.
UiPath reported strong financial results for the fourth quarter of fiscal 2025, with a 5% year-over-year revenue increase to $424 million and an Annual Recurring Revenue (ARR) growth of 14% to $1.666 billion. The company maintained a solid dollar-based net retention rate of 110%, with GAAP and non-GAAP gross margins of 85% and 87%, respectively. It achieved a GAAP operating income of $34 million and a non-GAAP operating income of $134 million. UiPath closed the quarter with $1.7 billion in cash, cash equivalents, and marketable securities.
Regarding fiscal 2026, management has issued guidance projecting revenue between $1.525 billion and $1.530 billion and ARR growth to reach up to $1.821 billion. The company anticipates a non-GAAP operating income of approximately $270 million despite acknowledging economic uncertainty, particularly in the U.S. public sector.
Analysts Issue a Cautious Outlook
Multiple Wall Street analysts have downgraded UiPath’s stock rating following the disappointing forward guidance, signaling decreased confidence in the company’s near-term performance. Bank of America, for example, lowered its rating from Neutral to Underperform and reduced the price target to $10, citing challenges in execution and growth. Similarly, BMO Capital’s analyst, Keith Bachman, maintained a Hold rating with a price target of $11.50, noting several factors impacting UiPath’s performance and outlook. Notably, the company missed both ARR and revenue estimates and provided guidance for FY26 that suggests growth will be back-end weighted, prompting a revision of future estimates downward.
UiPath is rated a Hold overall, based on the recent recommendations of 21 analysts. The average price target for PATH is $12.03, which represents a potential upside of 10.57% from current levels.
