Artificial intelligence (AI) is amplifying the performance of technology companies. If investors believe they missed out on the larger tech titans that are dominating the AI market, there are a few other options at a cheaper price. As the world moves toward automation, the demand for robotic companies in a variety of industries is increasing. One such stock is UiPath (PATH), a global robotic automation company that trades at around $13 per share. 

UiPath specializes in robotic process automation (RPA) and provides a comprehensive platform for automating tasks that were previously manual, repetitive, and time-consuming. Its flagship product, the UiPath Automation Platform, integrates with a variety of business applications, enabling seamless automation. It serves a wide range of clients, including banking, healthcare, manufacturing, and retail. 

Despite a solid financial trajectory and strong third-quarter results, PATH stock fell 46.6% in 2024, trailing the S&P 500 Index’s ($SPX) 24% gain. Nonetheless, Wall Street sees a potential 47% increase in UiPath shares this year this year. Let’s find out more about this growth stock.

UiPath Reported Another Strong Quarter

Strong customer demand and continued platform adoption resulted in another successful quarter. UiPath’s annual recurring revenue (ARR) increased 17% year-over-year to $1.6 billion in the third quarter of fiscal 2025. The company reported $355 million in revenue for Q3, a 9% increase over the same period last year.

Furthermore, adjusted operating income reached $50 million, reflecting an operating margin of 14%, thanks to cost-cutting initiatives and improved operational efficiencies. Adjusted net income also came in at $59.8 million compared to $69 million in the year-ago quarter. 

UiPath highlighted its robust cash generation capabilities in Q3, generating $33 million in adjusted free cash flow, with a full-year target of around $325 million. The company also ended the quarter with $1.6 billion in cash, cash equivalents, and marketable securities and no debt on the balance sheet as of October 2024. 

AI Is a Growth Catalyst for UiPath

With the integration of AI, the UiPath Business Automation Platform has evolved. In the quarter, the company made a significant leap forward with its Agentic Automation vision. This AI-powered automation framework will allow businesses to use intelligent agents to automate a wider range of tasks, signaling a shift away from traditional automation and toward more sophisticated, AI-driven solutions. The company intends to launch it this year.

UiPath believes Agentic Automation will help it strengthen its position in the emerging AI-driven automation market, which is expected to reach $4.1 billion by 2028.

UiPath’s upcoming product launches showcase its commitment to innovation. Among them is Agent Builder, a tool that will allow businesses to create AI agents in their local development environments, which will be available for public preview in February. In addition, the company intends to release Agentic Orchestration, a solution that will allow organizations to manage AI agents across large, complex business processes, thereby improving scalability in fiscal 2026.

Management expects fourth-quarter revenue to be between $422 million and $427 million. Additionally, ARR could be between $1.669 billion and $1.674 billion.

While the company did not provide full-year guidance, analysts expect UiPath’s revenue to rise by 9.4% while earnings may fall by 12.3% in fiscal 2025. In fiscal 2026, revenue and earnings are expected to rise by 10.6% and 7.1%, respectively. The company believes that in fiscal 2026, by refocusing to be more customer-centric, it can stabilize net new ARR dollars and speed up adjusted free cash flow growth.

The global RPA market is projected to grow at a compounded rate of 39.9% by 2030. UiPath’s first-mover advantage and expertise in the RPA market could help transform workplaces through AI-driven automation. UiPath’s goal is to lead the next generation of enterprise automation by incorporating AI into every aspect of the platform and it is well-poised to achieve this goal.

Trading around five times forward 2025 sales, PATH appears to be a top AI growth stock to buy now at under $20 for risk-tolerant investors with a long-term horizon.

What Do Analysts Say About PATH Stock?

On Wall Street, UiPath stock is rated as a “Hold.” Of the 21 analysts that cover the stock, two rate it a “Strong Buy,” 18 rate it a “Hold,” and one rates it a “Strong Sell.” Based on the average target price of $15.50, the stock has upside potential of 18% from current levels. Its Street-high estimate of $19 further implies the stock can go as high as 44.6% in the next 12 months.