Enterprise automation with AI is becoming essential for businesses to enhance efficiency and decision-making. 

UiPath (PATH) is a key player, leveraging AI-driven “agentic automation” to optimize workflows beyond traditional rule-based systems. 

The company’s shift to a subscription model has strengthened revenue stability while restructuring efforts improved execution and sales.

However, market expectations remain conservative, underestimating its growth potential.

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Enterprise automation with AI has steadily become a cornerstone for organizations aiming to improve daily operations.

Large companies are increasingly leaning on smart automation systems to handle repetitive and time-consuming tasks. These systems combine data with adaptable algorithms to learn and optimize work processes.

By integrating these AI solutions into existing workflows, companies experience faster decision-making and improved efficiency.

Real-world applications show that when businesses automate routine tasks, the accuracy of work improves, operational errors drop, and overall productivity rises.

UiPath (PATH) has emerged as a critical player in enterprise automation, helping businesses streamline operations by automating repetitive tasks and complex workflows.

While the company’s core offering, Robotic Process Automation (RPA) is well-established, its recent pivot toward AI-driven “agentic automation” shows the most potential.

Unlike traditional automation, which follows predefined rules, agentic automation leverages AI to independently identify optimization opportunities, adapt workflows, and execute decisions with minimal human intervention.

This means that businesses can expect to see not only faster operations but also an overall boost in efficiency.

By reducing the time spent on manual tasks, companies can better allocate their resources and maintain a competitive edge.

A key development in UiPath’s journey has been its move toward a subscription-based model. 

Shifting from a one-time license sale to a recurring subscription has allowed the company to build a more sustainable business.

This change resulted in a more predictable revenue stream and a growing customer base that relies on the platform to continuously support their operations.

With this model, businesses can scale their use of automation services over time, ensuring that they always have access to the latest tools and updates.

UiPath has also been focusing on improving its internal operations. Earlier this year, the company worked hard to address execution issues that had affected large contract deals.

By restructuring its organization and streamlining sales processes, the company has laid the groundwork for a more agile and responsive service.

Partnerships and customer wins further validate this progress. Integration with SAP’s Process Automation solution has already attracted enterprise clients.

Additionally, UiPath’s Autopilot for Everyone secured its largest deal to date with a major healthcare customer.

All these factors combined enabled the company to finally reach profitability.

However, the market is not fully aware of the growth potential of UiPath and enterprise automation.

We can see what the market thinks through our Embedded Expectations Analysis (“EEA”) framework.

The EEA starts by looking at a company’s current stock price. From there, we can calculate what the market expects from the company’s future cash flows. We then compare that with our own cash-flow projections.

In short, it tells us how well a company has to perform in the future to be worth what the market is paying for it today.

At the current stock price, the market expects the company’s Uniform return on assets ”ROA” to only improve to around 10%.

UiPath isn’t without risks, execution must continue improving and macroeconomic uncertainty could delay IT spending.

But the company’s focus on AI-enhanced automation, coupled with a refined go-to-market strategy, positions it to outperform in a large, underpenetrated market.

For investors willing to tolerate near-term volatility, UiPath offers a compelling bet on the future of how enterprises work.

Best regards,

Joel Litman & Rob Spivey
Chief Investment Officer &
Director of Research
at Valens Research