UiPath (PATH) Stock earnings preview: What to watch after Thursday's close

Quick Summary

UiPath will release its second-quarter financial report for the fiscal year 2027 after the close of trading on Thursday, September 3. Analysts expect non-GAAP earnings per share of $0.15 and revenue of $397.85 million, near the upper limit of management guidance. PATH shares have surged nearly 40% in the past month and are currently hovering around $18.15. Key areas of concern: ARR trajectories, customer retention metrics, and progress in agent-based artificial intelligence. The automation platform provider has exceeded earnings and sales expectations seven times in the past eight reporting periods.

The automation software company UiPath (PATH) will announce its second-quarter fiscal 2027 financial results after the close of trading on Thursday (September 3). The stock price is currently around $18.15, and has risen as much as 40% in the past 30 days.

The market consensus forecast for non-GAAP earnings per share was $0.15 and revenue was $397.85 million. The revenue forecast is close to the upper end of the company's guidance range of $395 million to $400 million.

Last quarter, UiPath's revenue was US$418.4 million, a year-on-year increase of 17.3%. Annual recurring income (ARR) reached US$1.901 billion, an increase of 12%, and the net US dollar Retention rate was 109%.

The enterprise software maker also achieved its first quarterly GAAP operating profit of $27.99 million in the first quarter. This profit milestone has attracted a large number of investors 'attention.

For the quarter, Wall Street models showed revenue increased by approximately 10% year-on-year. This slowed down from the 14.4% growth rate in the same period in the previous fiscal year.

Company guidance expects ARRs to be between $1.929 billion and $1.934 billion in the second quarter, and non-GAAP operating income to be approximately $75 million. These data will be closely watched by market participants.

UiPath has exceeded earnings and revenue forecasts seven times in the past eight quarters. The stable execution record provided some optimism for investors holding long positions ahead of Thursday's earnings report.

Divergent analyst views

The analyst community remains divided on the prospects of PATH. SA analyst Investing Smart maintained a "hold" rating, pointing to increased competition, lowered full-year growth expectations, and short positions accounting for about one-third of outstanding shares.

Such high short positions create the conditions for the market to fluctuate significantly in either direction after the earnings report. Traders should be prepared accordingly.

In contrast, SA analyst Danil Sereda gave a "buy" recommendation. His argument predicts that UiPath will exceed second-quarter revenue estimates and achieve its ARR target of $1.93 billion, thanks to the company's solid cash reserves, profit path and emerging agent-based artificial intelligence opportunities.

The analyst consensus target price is $13.87, which is significantly lower than the current market price of $18.08. This valuation gap deserves consideration by potential investors.

Beyond the headlines

While revenue and earnings per share are critical, they do not provide the full picture. Market participants will focus on ARR momentum, Retention rate and customer adoption of agent-based artificial intelligence capabilities.

Company management has highlighted initial signs of a renewed acceleration of business, including an 18% year-on-year increase in the number of ARR customers contributing more than US$1 million. This indicator of corporate customer expansion will be closely watched.

Threats from Microsoft (MSFT), OpenAI and other AI-focused competitors persist. The investment community will examine management's strategies to defend and expand market share.

PATH shares are up 12.08% year-to-date, slightly above the S & P 500's return of 11.48%. The stock has risen just 1% in the past week, indicating investors are holding a wait-and-see attitude ahead of earnings reports.

Seller analysts tracking the company have maintained relatively stable forecasts over the past 30 days, indicating that market expectations are in line with current forecasts.

Limited time offer Get 3 free stock e-books

Discover the best performing stocks in artificial intelligence, cryptocurrency and technology analyzed by experts.

Top Ten Artificial Intelligence Stocks-Leading Artificial Intelligence Companies

Top Ten Cryptocurrency Stocks-Blockchain Leaders

Top Ten Technology Stocks-Technology Giants

Get your free e-book