Better Robotics Stock: UiPath or Zebra Technologies

Zebra Technologies (NASDAQ: ZBRA) and UiPath (NYSE: PATH) occupy powerful sweet spots in enterprise technology, acting as the foundational layers for corporate automation and robotics. While Zebra handles physical, on-the-ground hardware and data capture, UiPath automates back-office digital workflows.

These companies benefit from the rising trend toward automation in industry. A RobCo survey of 400 senior business leaders across sectors, including manufacturing, construction, engineering, and healthcare, found that 95% of U.S. industrial firms plan to introduce new automation over the next three years, with more than half currently testing or planning to use robots in production and back-office processes.

Zebra Technologies' stock is up more than 11% this year. Both stocks are trading at around 15 times forward earnings.

Here are the reasons to buy each stock.

Image source: Getty Images

Industrial demand drives Zebra's outlook

Zebra makes hardware, software, and automation solutions designed to bridge the gap between physical items and digital workflows. Its scanners track products from the factory floor to the last mile of deliver. The company is experiencing a strong structural turnaround. In the first quarter, it reported $1.49 billion in sales, up 14.3% year over year, while earnings per share (EPS) were $2.78, up 3.8% year over year.

Management lifted its full-year 2026 outlook, forecasting sales growth of 10% to 14% and non-GAAP EPS between $18.30 and $18.70. It said that short-cycle industrial demand is returning strongly across manufacturing, logistics, and healthcare.

Strong pricing power improves margins

Zebra has shown incredible pricing power and operational discipline. The company expanded its adjusted gross margin to 50.4%, compared to 49.6% in the first quarter of 2025.

The growth came from successfully implementing internal productivity initiatives to mitigate rising memory and freight costs. The shift toward integrated single-vendor software, machine vision, such as its new CV70 CXP camera, and RFID tech is driving highly profitable, recurring revenue lines.

Free cash flow and share buybacks

Zebra is a cash-generating machine, with at least $900 million in free cash flow (FCF) expected for 2026, after posting $163 million in FCF in the first quarter. Management has a highly shareholder-friendly capital allocation strategy, having completed $300 million in share repurchases in each of the past two quarters, with further buybacks modeled into the second half of the year.

UiPath is adapting with agentic AI

The primary knock on UiPath has been that generative artificial intelligence (AI) would displace its core Robotic Process Automation (RPA) tools. Instead, UiPath has evolved into an AI orchestration layer. By integrating traditional bots with cognitive AI agents via its Maestro platform, UiPath enables enterprises to automate complex, non-deterministic tasks, such as insurance claims processing or compliance checks. This expands the company's total addressable market far beyond rigid, rule-based tasks.

UiPath has invested heavily in AI agents that can reason, adapt, and act autonomously without human intervention. Chief financial officer Ashim Gupta said that the company's fastest-growing area is in agentic and AI-based automation, and 16 of the company's top 20 deals used AI.

In May, it launched UiPath for Coding Agents, a platform that enables customers to use various coding agents to develop workflow automations through UiPath.

Bridging the gap to profitability

UiPath reported revenue of $418.4 million in the first quarter of fiscal 2027, up 17.3% year over year. The company reached an operational milestone by posting its third consecutive quarter of true GAAP profitability, with EPS of $0.04, compared to a loss of $0.04 in the same period a year ago. Driven by scaling non-GAAP operating margins to 22%, the company's financial profile has stabilized into a sustainable, highly efficient software engine.

The company's annual recurring revenue (ARR) grew 12% year over year to $1.9 billion, part of a steady rise over the past several quarters.

Discounted valuation with a margin of safety

Trading near the lower end of its 52-week range at around $11.77, the stock has been heavily penalized by what the market saw as so-so guidance. The company is predicting full-year revenue of $1.767 billion to $1.781 billion, up 10.4% at the midpoint, and full-year ARR of $2.058 billion to $2.063 billion, up 11.2% at the midpoint. Non-GAAP operating income was forecast to be $430 million, up 16.2%. All of those numbers still signify double-digit percentage growth, however.

The lack of enthusiasm for the stock has created a compelling value opportunity. It just announced a $500 million share repurchase program, following the completion of $1 billion in stock buybacks. Demand is increasing for its proven, high-return-on-investment automation tools. The stock offers an attractive entry point for investors waiting for a valuation rerating.

James Halley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends UiPath and Zebra Technologies. The Motley Fool has a disclosure policy.