PATH
UiPath Inc.
$10.93
High-Growth Software
80%
Revenue × Terminal Margin DCF
Moderate
·
Conviction
Undervalued
Trading 27.1% below fair value
You pay
$10.93
Bear
$10.97
Fair
$14.99
Bull
$19.29
Bear
$10.97
+0.4%
8% rev growth, 21% terminal margin
Fair
$14.99
+37.1%
11% rev growth, 28% terminal margin
Bull
$19.29
+76.5%
14% rev growth, 32% terminal margin
Key Value Driver
Revenue growth (11%) × margin expansion to 28%
Terminal Value % of EV
53%
Implied Market Multiple
2.8x
Summary
Our base-case estimate uses a discounted cash flow model based on revenue growth and long-run free cash flow margins. We then blend that result with the average analyst price target of $15.82 from 24 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $14.99 per share.
Warnings
Gross margin of 83% means each dollar of revenue is highly profitable. As the company grows, overhead costs should shrink as a share of revenue, boosting overall profits.
Key Risks
- Current FCF misleads — the model values future margins, not today's cash
- SBC dilution is the hidden tax: 2-4% annual share growth compounds fast
- Revenue deceleration is inevitable — the question is when and how steep