C3.ai Beats Q4 Estimates: Stock Sells Off, Analysts Weigh In

Enterprise artificial intelligence company C3.ai Inc (NYSE:AI) issued its fourth-quarter earnings on Wednesday, beating Street estimates with a revenue of $72.4 million, a slight increase from last year’s $72.3 million.

The company, having posted a loss of 13 cents per share, did better than the expected loss of 17 cents per share. Subscription revenue was $56.9 million, contributing to the full fiscal year revenue of $266.8 million.

C3’s guidance for the first-quarter ranges between $70 million and $72.5 million, with expectations for the full fiscal year to reach between $295 million and $320 million, according to Benzinga Pro.

What do the analysts think? Wedbush, JMP Securites, and Needham weigh in.

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The Wedbush Analyst: Dan Ives upgraded C3.ai from a Neutral rating to an Outperform rating, and raised the price target from $24 to $50.

Ives said C3.ai is prepared to capitalize on the $800 billion AI transformational opportunity with increasing use cases. He considered this quarter’s performance impressive despite the conservative fiscal 2024 revenue guidance.

The JMP Analyst: Patrick Walravens maintained a Market Outperform rating, while raising the price target from $28 to $38.

Walravens commended the company’s consistent fourth-quarter results and its transition to a consumption model. He also highlighted C3.ai’s opportunity in national security and defense as significant.

The Needham Analyst: Mike Cikos maintained a Hold rating on the stock, and did not update the price target.

Despite the high-end revenue report for the fourth-quarter, Cikos saw it as lower-quality, driven by higher than expected Professional Services. He reemphasized the ongoing challenges of C3.ai's shift to a consumption model, especially the interim impact on profitability. His primary concerns include valuation and competition.

C3.ai Price Action: Shares of C3.ai are trading 11.3% lower to $35.46 at the time of publication on Thursday.

This article was generated using AI tools, it was edited by the author and editor.

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