C3.ai Analysts Mixed After FQ2 Print: 'Investors Justifiably Skeptical,' But Long-Term Opportunity Looks Promising

Zinger Key Points
  • C3.ai projected a return to +30% growth over the next 18-months, but proof points are needed, one analyst said.
  • Customer count is the best near-term metric and the company added 8 during the quarter, another analyst stated.

Shares of C3.ai Inc AI remained highly volatile in Wednesday's after-hours session, although the company reported better-than-expected fiscal second-quarter results.

Here are key (and differing) takeaways from top analysts from Piper Sandler, Needham and JMP Securities.

Piper Sandler On 3 C3.ai

Analyst Arvind Ramnani maintained a Neutral rating, while reducing the price target from $14 to $13.

The company reported its quarterly results ahead of “the Street's tempered expectations,” Ramnani said in a note. Although management reaffirmed full-year guidance, they warned of booking headwinds due to "pervasive economic uncertainty," he added.

While C3.ai expects to “return to +30% growth over the next 18 months, given investments in its product and shift in pricing model,” the analyst mentioned he would like to see “proof points” revisiting estimates.

Check out other analyst stock ratings.

Needham On 3 C3.ai

Analyst Mike Cikos reiterated a Hold rating on C3.ai's stock. No price target was included in the report.

“C3.ai completed its first quarter since announcing the model transition toward a Consumption pricing model,” Cikos wrote in a note.

Management reiterated its revenue guidance for the full year, “noting the transition is on track,” he added.

“The company added 8 customers during the quarter, and we view Customer Count as the best near-term metric,” the analyst mentioned. “Also, C3 engaged in 13 pilots and trials - well-above management's previous assumption for 5.”

JMP Securities On 3 C3.ai

Analyst Patrick Walravens reaffirmed a Market Outperform rating, while reducing his price target on the stock from $25 to $19.

The company’s results were “generally better than expected” and an improvement over the previous quarter, Walravens said. “Guidance was mixed as C3.ai continues to face a 'rocky' business environment,” he added.

“While the road has been very bumpy for C3 and investors are justifiably skeptical, we continue to like the long-term opportunity,” the analyst concluded.

AI Price Action: Shares of 3 C3.ai had risen by more than 6% to $12.71 at the time of publication Thursday.


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Posted In: Analyst ColorEarningsNewsPrice TargetReiterationSmall CapAnalyst RatingsMoversTrading IdeasArvind RamnaniJMP SecuritiesMike CikosNeedhamPatrick WalravensPiper Sandler
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