Should You Buy The Dip In UiPath Stock?

UiPath (PATH) is down about a third from its late-August high, including a fall after a DA Davidson downgrade over its AI pricing. A price that much lower can tempt you to buy, but a stock that falls this fast can also keep falling. So should you buy UiPath stock on this drop, or expect further losses?

Buying UiPath After Big Falls Usually Worked, Slowly

On UiPath’s own record, buying after a big fall usually worked, though gains came only after further losses. Since 2021, the stock has fallen 30% or more within 30 trading days six times. Three of the four falls old enough to judge ended the following year higher. The median return over that year was 15%.

Buyers needed patience to collect those gains. In the median case, the stock first dropped a further 22% from the buying price. The best gain within a year came a median 228 days after the fall, about seven and a half months. Today’s slide is not one of those falls. UiPath is down 23% over the last 30 trading days.

Those falls show how UiPath stock behaved before. The business today is the other part of the answer.

Is UiPath’s Business Holding Up Under The Drop?

Yes, on its reported figures. UiPath’s revenue grew 15% over the past twelve months. Over three years, sales grew an average 14.5% a year, against 5.8% for the S&P 500. Management guided revenue of $440 million to $445 million for fiscal Q3 2027, with results due on or around December 1, 2026.

UiPath now keeps 8.9% of its revenue as operating profit, after running costs. Three years ago, it ran an operating loss equal to 21% of revenue. Operating cash flow came to 21.7% of revenue over the past twelve months. Management said UiPath ended its latest quarter with $1.4 billion in cash and securities, and no debt.

UiPath’s pricing for AI is still unsettled. On the September earnings call, management said the company is still experimenting with pricing models for its AI agent products. UiPath recently introduced transaction-based pricing, a charge per transaction, for its process orchestration product. Management said the company is probably heading toward outcome-based pricing. The stock fell after a downgrade that cited concerns about that pricing.

How Far Could UiPath Stock Sink After You Buy?

UiPath’s worst past case followed the fall on March 15, 2022. A buyer that day saw the stock drop a further 57.6% from that day’s price. A $10,000 purchase that day would have been worth about $4,240 at the low. That buyer was still down 31% a year later. A further fall like the worst past one is the risk a buyer takes on next to the median gain.

Most past falls old enough to judge ended a year higher, and sales are still growing. But the timing of any recovery is unknown. A buyer today is counting on UiPath to keep growing sales and to settle how it prices its AI. If that pricing stays unsettled, UiPath’s past recoveries are a weaker guide to this fall. Can you hold through a further fall while UiPath works out what customers will pay for its AI?

How To Act On PATH?

Before you decide on PATH, consider a better choice. Since its inception, the Trefis High Quality (HQ) Portfolio has beaten the benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with retail stock picking.

If you’d rather act on PATH itself:

Play Offense	Play Defense
Learn More About PATH & Invest	Save Taxes On Capital Gain
Earn From PATH Cash Secured Puts	Covered Call Against PATH

See Your Next Steps On PATH