Should You Buy, Sell or Hold UiPath Stock Ahead of Q2 Earnings?

Core Insights - UiPath Inc. (PATH) is scheduled to report its second-quarter fiscal 2026 results on September 4, with earnings expected to be 8 cents, reflecting a more than 100% increase year-over-year. Revenue estimates are set at $347.8 million, indicating a 10% year-over-year growth [1][8]. Earnings Performance - The company has a strong earnings surprise history, having exceeded the Zacks Consensus Estimate in each of the last four quarters, with an average surprise of 34.3% [2]. - However, the current model does not predict a definitive earnings beat for this quarter, as PATH has an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold) [3][4]. Revenue Breakdown - The consensus estimate for license services revenues is $111 million, which represents a 19.1% decline year-over-year. In contrast, subscription revenues are expected to reach $227.1 million, showing a 9.7% increase year-over-year. Professional services and other revenues are estimated at $9.6 million, down 8.7% year-over-year [5][8]. Stock Performance - UiPath's stock has decreased by 13.7% over the past year, while its industry has surged by 39.6% and the Zacks S&P 500 Composite has increased by 15.5% [6]. - The stock is currently trading at a trailing 12-month price-to-earnings ratio of 18.87X, which is lower than the industry average of 38.82X [10]. Strategic Partnerships - Partnerships with Microsoft and Amazon have significantly enhanced UiPath's credibility and market reach. Microsoft regards UiPath as its preferred enterprise automation platform, while Amazon has integrated UiPath with its AWS offerings [12]. Annual Recurring Revenue - In the second quarter of fiscal 2026, PATH reported a 6% year-over-year increase in total revenue, with annual recurring revenues (ARR) growing by 12% year-over-year, reaching $1.6 billion. This indicates effective subscription model performance and strong client loyalty [13]. Analyst Sentiment - There have been no changes in earnings per share estimates over the past 60 days, suggesting a neutral outlook from analysts regarding the company's near-term performance [14].