UiPath Inc. (PATH) had a pretty good quarter, by the numbers. The company beat revenue estimates, raised its full-year outlook, and talked up AI-driven momentum. So why did the stock drop 17% on Friday? Because Wall Street seems to think the good news was already in the price.
Let's break it down. UiPath reported quarterly earnings of 15 cents per share, which matched what analysts were expecting. Revenue came in at $410.26 million, beating the Street's estimate of $397.95 million. The company also raised its fiscal 2027 revenue outlook to a range of $1.789 billion to $1.794 billion, up from the previous $1.776 billion to $1.781 billion. That new range also topped the consensus estimate of $1.778 billion.
So, solid numbers, right? But the market wasn't impressed. Instead, several analysts took the opportunity to tweak their price targets and ratings, and the overall tone was cautious.
Canaccord Genuity's Kingsley Crane actually downgraded UiPath from Buy to Hold, even though he raised his price target from $15 to $17. That might sound contradictory, but it makes sense when you consider that the stock has already rallied hard over the past three months. Crane also pointed to an increasingly fluid competitive environment. He plans to reassess his view after talking to customers at UiPath's conference in about three weeks.
DA Davidson's Lucky Schreiner kept a Neutral rating but bumped his price target from $12 to $16. He's encouraged by stable annual recurring revenue (ARR) growth, but he notes that adoption of UiPath's newer AI products is still in its early stages. In other words, the current valuation already reflects a lot of the expected growth.
RBC Capital Markets' Matthew Hedberg maintained a Sector Perform rating and raised his price target from $15 to $17. RBC said AI-driven deal momentum, new product adoption, and improving customer retention were all encouraging. But the firm is still looking for signs that UiPath's growth can actually accelerate. Hedberg noted that management raised its fiscal 2027 outlook on positive underlying business trends, a healthy pipeline, and strong customer momentum, despite a variable macroeconomic environment.
TD Cowen's Bryan C. Bergin also kept a Hold rating but raised his price target from $13 to $16. He said the second-quarter results benefited from healthy ARR growth, stable net revenue retention, and rising AI adoption. Bergin acknowledged that execution and the relevance of UiPath's platform appear to be improving. But here's the catch: the stock's sharp rally over the past three months, fueled by a reversal in the AI trade and a broader software recovery, has come before a clear improvement in growth. He thinks UiPath's upcoming investor day could provide more evidence of a path toward faster growth and AI monetization.
DA Davidson echoed that sentiment, saying the investor day could offer more details on the company's path toward acceleration.
So, what's the takeaway? UiPath is doing a lot of things right, and the AI narrative is helping. But analysts are wary of chasing the stock after such a big run. They want to see the growth actually materialize before they get more excited. The upcoming investor day and customer conference could be key catalysts to watch.
At the time of publication on Friday, UiPath shares were down 17.07% at $15.11.
