Is It Time to Buy UiPath With the Stock Beaten Down?

<p>UiPath (NYSE: PATH) shares have had a rough start to the year, with the stock price down nearly 30% year to date, as of this writing. The stock got caught in the <a href="https://www.fool.com/investing/stock-market/market-sectors/information-technology/saas-stocks/?utm_source=yahoo-host-full&amp;utm_medium=feed&amp;utm_campaign=article&amp;referring_guid=4b3b2895-2b35-4e4b-aca7-4461b65ff48e">software-as-a-service (SaaS)</a> sell-off, and its Q4 earnings report did little to ease investor fears, despite the company solidly beating expectations and issuing upbeat guidance.</p>
<p>UiPath is a robotic process automation (RPA) company that has been transforming itself into an AI orchestration platform to help manage both simple software bots and AI agents. Let's take a close look at the company's quarterly results and prospects to see if the stock's sell-off is a buying opportunity.</p>
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<h2>Gaining some momentum</h2>
<p>UiPath has been doing well within its existing customer base, and that continued in the fourth quarter of fiscal year 2026, ended Jan. 31, with the company reporting a 107% <a href="https://www.fool.com/terms/n/net-revenue-retention/?utm_source=yahoo-host-full&amp;utm_medium=feed&amp;utm_campaign=article&amp;referring_guid=4b3b2895-2b35-4e4b-aca7-4461b65ff48e">dollar-based net retention</a> rate. Any number over 100% indicates that existing customers are growing after churn. Meanwhile, it said it saw its best large customer growth in two years, with a 50% increase in new customers with annual recurring revenue (ARR) of $1 million or more in the quarter. (Note that UiPath's ARR consists of its annualized subscription revenue and maintenance and support obligations, but doesn't include perpetual license or professional service revenue.)</p>
<p>The company's growth is being led by the momentum it is seeing in AI product revenue, especially with agentic AI. AI product ARR reached $200 million, with 25% growth in customers spending $100,000 or more with the company. It said that 60% of customers with ARRs of $100,000 or more and 90% of $1 million ARR customers use its AI products.</p>
<p>Overall revenue for the quarter rose by 14% to $481.1 million, cruising past analyst expectations of $464.9 million. Its AAR increased by 11% year over year to $1.85 billion, while it added $70 million in new ARR in the quarter, a 15% increase. Adjusted earnings per share (EPS) jumped by 15% to $0.30, surpassing the $0.25 consensus.</p>
<p>Looking ahead, UiPath guided for first-quarter revenue in the range of $395 million to $400 million, with the midpoint above the $393.4 million analyst consensus. It guided for ARR between $1.894 billion and $1.899 billion. For the full year, it forecast revenue to be between $1.754 billion and $1.759 billion, with ARR of between $2.051 billion and $2.056 billion.</p>