C3.ai Faces Dystopian Reality as Stock Plummets 8% Amidst Unmet Expectations – C3.ai (AI), a leading provider of AI enterprise software, has faced scrutiny from investors following the release of its first-quarter fiscal year 2025 earnings report.
The report revealed weaker-than-expected subscription revenue, causing the stock to decline by 8% on Thursday.
The market has been closely watching companies benefiting from the recent hype surrounding artificial intelligence.
Investors are now taking a more cautious approach, particularly toward firms that may exhibit headwinds in the AI sector.
Earnings Report Results
C3.ai reported subscription revenue of $73.5 million, falling short of consensus estimates by 7%.
However, professional services revenue exceeded expectations, reaching $13.5 million.
C3.ai Faces Dystopian Reality – Analyst Reactions
Following the report, several firms lowered their price targets on C3.ai stock.
JPMorgan analysts cited the underperformance in subscription revenue as a concern, highlighting the volatility in the company’s revenue model.
They lowered their target from $24 to $19 per share.
CEO’s Response
Despite the negative market reaction, C3.ai CEO Tom Siebel defended the company’s performance, stating that it was “a great quarter” with 21% year-over-year growth.
Siebel dismissed any concerns raised by analysts.
Historical Context
C3.ai experienced a surge in stock price earlier this year amid the AI craze.
However, the stock has since lost all of its year-to-date gains, reflecting the market’s cautious sentiment toward AI-related investments.
Concerns Over Demand
Investors are expressing concerns about demand for AI products and services.
This skepticism has been fueled by statements from executives such as Michael Dell, founder and CEO of Dell Technologies, who has suggested that talk of an AI slowdown is overblown.
C3.ai Faces Dystopian Reality as Stock Plummets 8% Amidst Unmet Expectations
The decline in C3.ai’s stock price underscores the increasing scrutiny facing companies in the AI sector.
Investors are demanding more clarity on revenue growth and demand sustainability as they assess the potential impact of headwinds in the AI landscape.
C3.ai Faces Dystopian Reality – Company Statistics
Total Valuation: C3.ai has a market cap or net worth of $2.67 billion. The enterprise value is $2.23 billion.
- Market Cap: 2.67B
- Enterprise Value: 2.23B
Important Dates
The last earnings date was Wednesday, September 4, 2024, after market close.
C3.ai Faces Dystopian Reality – Share Statistics
C3.ai has 126.84 million shares outstanding. The number of shares has increased by 8.59% in one year.
- Shares Outstanding: 126.84M
- Shares Change (YoY): +8.59%
- Shares Change (QoQ): +1.88%
- Owned by Insiders (%): 10.99%
- Owned by Institutions (%): 43.45%
- Float: 110.67M
Valuation Ratios
- PE Ratio: n/a
- Forward PE: n/a
- PS Ratio: 8.60
- Forward PS: 7.87
- PB Ratio: 3.29
- P/FCF Ratio: n/a
- PEG Ratio: n/a
Financial Position
The company has a current ratio of 7.86.
- Current Ratio: 7.86
- Quick Ratio: 7.65
- Debt / Equity: n/a
- Debt / EBITDA: n/a
- Debt / FCF: n/a
- Interest Coverage: n/a
Financial Efficiency
- Return on Equity (ROE): -30.78%
- Return on Assets (ROA): -18.45%
- Return on Capital (ROIC): -21.86%
- Revenue Per Employee: $365,245
- Profits Per Employee: -$312,194
- Employee Count: 891
- Asset Turnover: 0.30
C3.ai Faces Dystopian Reality – Stock Price Statistics
The stock price has decreased by -33.69% in the last 52 weeks. The beta is 1.80, so C3.ai’s price volatility has been higher than the market average.
- Beta (5Y): 1.80
- 52-Week Price Change: -33.69%
- 50-Day Moving Average: 26.39
- 200-Day Moving Average: 27.09
- Relative Strength Index (RSI): 25.48
- Average Volume (20 Days): 4,091,708
Income Statement
In the last 12 months, C3.ai had revenue of $325.43 million and -$278.17 million in losses. Loss per share was -$2.29.
- Revenue: 325.43M
- Gross Profit: 190.18M
- Operating Income: -316.84M
- Pretax Income: -278.90M
- Net Income: -278.17M
- EBITDA: -305.35M
- EBIT: -316.84M
- Loss Per Share: -$2.29
Balance Sheet
The company has $762.54 million in cash and $0 in debt.
- Cash & Cash Equivalents: 762.54M
- Total Debt: n/a
- Net Cash: 762.54M
- Net Cash Per Share: $6.01
- Equity (Book Value): 874.92M
- Book Value Per Share: 7.00
- Working Capital: 808.48M
Cash Flow
In the last 12 months, operating cash flow was -$58.26 million and capital expenditures -$14.84 million, giving a free cash flow of -$73.10 million.
- Operating Cash Flow: -58.26M
- Capital Expenditures: -14.84M
- Free Cash Flow: -73.10M
- FCF Per Share: -$0.58
Margins
Gross margin is 58.44%, with operating and profit margins of -97.36% and -85.48%.
- Gross Margin: 58.44%
- Operating Margin: -97.36%
- Pretax Margin: -85.19%
- Profit Margin: -85.48%
- EBITDA Margin: -93.83%
- EBIT Margin: -97.36%
- FCF Margin: -29.10%
Dividends & Yields
C3.ai does not appear to pay any dividends at this time.
Analyst Forecast
The average price target for C3.ai is $22.73, which is 26.42% higher than the current price. The consensus rating is “Buy”.
- Price Target: $22.73
- Price Target Difference: 26.42%
- Analyst Consensus: Buy
- Analyst Count: 11
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