PATH WACC - Weighted Average Cost of Capital
The WACC of Uipath Inc (PATH) is 10.0%.
| Range | Selected | |
| Cost of equity | 11.5% - 15.0% | 13.25% |
| Tax rate | 3.2% - 4.3% | 3.75% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 9.1% - 10.9% | 10.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.66 | 1.81 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.5% | 15.0% |
| Tax rate | 3.2% | 4.3% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 9.1% | 10.9% |
| Selected WACC | 10.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PATH | Uipath Inc | 1.05 | 1.5 | 0.75 |
| ADBE | Adobe Inc | 0.03 | 0.93 | 0.9 |
| ADSK | Autodesk Inc | 0.04 | 1.07 | 1.04 |
| CRM | Salesforce.Com Inc | 0.03 | 1.28 | 1.24 |
| FTNT | Fortinet Inc | 0.01 | 1.38 | 1.37 |
| INTU | Intuit Inc | 0.03 | 0.71 | 0.69 |
| MSFT | Microsoft Corp | 0.02 | 1.07 | 1.05 |
| ORCL | Oracle Corp | 0.21 | 1.61 | 1.34 |
| SNPS | Synopsys Inc | 0 | 1.61 | 1.61 |
| VMW | VMware Inc | 0.17 | 0.95 | 0.82 |
| WDAY | Workday Inc | 0.04 | 1 | 0.96 |
| Low | High | |
| Unlevered beta | 0.96 | 1.05 |
| Relevered beta | 1.99 | 2.21 |
| Adjusted relevered beta | 1.66 | 1.81 |
PATH's CAPM model and how its cost of Equity is calculated
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for PATH:
cost_of_equity (13.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.66) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.