Should You Buy, Sell, or Hold UiPath Stock Before Q1 Earnings?

UiPath Inc. PATH is set to report first-quarter fiscal 2026 results on May 29, after the bell.

The Zacks Consensus Estimate for earnings is pegged at 10 cents, indicating a 23% decline from the year-ago reported number. The consensus estimate for revenues is pinned at $332.3 million, implying a 0.8% year-over-year decline.

One estimate for the fiscal first quarter has been revised downward in the past 60 days.

The company has an impressive earnings surprise history. Earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 36.4%.

Bleak Possibility of Q1 Earnings Beat for PATH

Our proven model doesn’t conclusively predict an earnings beat for PATH this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

PATH has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

License Revenue Weakness: A Major Q1 Headwind

The Zacks Consensus Estimate for license services revenues is pegged at $115 million, indicating an 18% year-over-year decline. The consensus mark for subscription revenues is pegged at $137.3 million, implying a 12% year-over-year decline. The consensus estimate for professional services and other revenues is pegged at $10 million, flat year over year.

PATH Stock Rebounds 7% After Sharp Decline

PATH has had a turbulent year, with its share price plunging 34% against the industry’s 29% growth. However, the momentum may be shifting. Over the past month, PATH has climbed 7%, signaling early signs of a possible recovery and renewed investor interest.

Investment Considerations for PATH

A critical driver of PATH’s success is its strategic alliances with top technology giants. Microsoft MSFT, Amazon’s AMZN AWS, and Salesforce CRM continue to play pivotal roles in expanding UiPath’s reach and capabilities. These partnerships not only bolster PATH’s credibility but also integrate its offerings into broader enterprise ecosystems powered by Microsoft Azure, AWS and Salesforce Cloud solutions.

In the fourth quarter of fiscal 2025, UiPath reported a 5% year-over-year revenue increase to $424 million. Meanwhile, annual recurring revenues climbed to $1.67 billion (up 14% from the previous year), underscoring the effectiveness of its subscription model and strong client loyalty. Through collaboration with innovators like Microsoft, Amazon and Salesforce, PATH is well-positioned to thrive in a competitive and fast-evolving automation landscape.

What Should Be an Investor’s Take?

PATH has shown resilience with steady revenue growth, particularly in its subscription services, which are projected to grow 12% year over year in the fiscal first quarter. Despite this, the company's earnings forecast suggests a 23% decline from the prior-year level and a lower chance of a beat. Given these factors, adopting a cautious wait-and-see approach ahead of the first-quarter results seems advisable.

PATH currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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