[BT Financial Analyst] C3. AI's stock price rose by more than 194%. Analysts say it's unclear how long the AI boom will last

Due to the popularity of OpenAI's ChatGPT and the widespread application of generative artificial intelligence, anything related to artificial intelligence (AI) is currently very popular. For example,$C3.ai (AI.US)$C3. AI's stock price has risen more than 194% this year so far. Although the artificial intelligence boom has driven the stock price of this enterprise artificial intelligence application software company higher, many analysts believe that judging from the current level, there is some room for the company's stock price to decline, so I have a wait-and-see attitude towards this stock.

Company Overview

C3.ai's current stock price is likely mainly due to the company's US stock code, or “AI.” As a result, the company is often viewed as a “genuine” artificial intelligence stock.

C3.ai has always provided enterprises with an expandable AI platform. C3.ai has established a data science platform and built a range of use-case-specific applications on that platform. The company sees itself as a superior enterprise artificial intelligence company. C3.ai currently has dozens of enterprise applications that provide predictive analysis in the fields of oil and gas, utilities, healthcare, manufacturing, aerospace, etc.

performance

C3.ai released preliminary financial results for the fourth fiscal quarter earlier this month. The company's data shows that C3.ai will surpass its previous guidance. The company will release fourth-quarter earnings in the near future. C3.ai expects fourth-quarter revenue of 72.1 million to 72.4 million US dollars. This shows that the company's revenue is roughly the same as its total revenue of $72.3 million in the same period last year. Despite this, the company's proposed fourth-quarter revenue forecast was higher than Wall Street's forecast of $71.32 million.

The company expects adjusted operating losses of $23.7 million to $23.9 million for the fourth quarter. This is a slightly better situation compared to the company's previous forecast of losses of 24 million to 28 million dollars. Analysts expect C3.ai to lose $0.17 per share compared to $0.21 per share for the same period last year.

C3.ai said the company completed 43 deals in the fourth quarter, which reflects the acceleration of the company's business development. Additionally, interest in generative artificial intelligence and its prospects continues to grow from existing customers. C3.ai signed 3 new generative artificial intelligence application agreements in the fourth fiscal quarter.

Additionally, the company reiterated its guidance for fiscal year 2024 (ending April 30, 2024).

Recently, Needham analyst Mike Cikos reiterated the stock's “hold” rating. Cikos said the change in the company's pricing strategy (moving from a subscription model to a consumption model) would benefit it in the long run. However, the analyst believes, “From an execution perspective, the company's transition has been very difficult.” Furthermore, due to this shift, C3.ai's profitability will remain under pressure in the short term.

Forecast for C3.ai stock

Overall, based on 3 buy, 4 hold, and 4 sell ratings, C3.ai received a consistent rating of “hold”. The average price target given by analysts is $20.57, which means the stock has 37.77% room to decline from current levels.

Author: Amit Singh

[BT Finance Reminder] This article is for reference only and does not constitute investment advice. Investors should not use this report as the sole reference factor for making investment decisions, nor should they consider it a substitute for their own judgment.

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