C3.Ai's Stock Skyrocketed This Year; Analyst Charts Path To FY25 Growth - C3.ai (NYSE:AI)

JMP Securities analyst Joe Goodwin reiterates C3.Ai, Inc AI with a Market Outperform and a $28 price target.
The brokerage's series of investor meetings in New York with Founder & CEO Tom Siebel, CTO, Products Anil Krishnan, and Amit Berry, Investor Relations on Tuesday and after the stock increased 98% year to date versus 15% for the Nasdaq prompted the re-rating.
The most common areas of investor questions included shifting to a consumption model, C3's use cases for generative AI, the spike in the unbilled receivables balance, and the company's relationship with Baker Hughes Co BKR.
Also Read: C3.ai's Innovative Approach: Analysts Envision Upside As Company Develops Enterprise Data Hub With Baker Hughes
The analyst highlighted two points. Despite a wide range of possible assumptions for modeling the shift to consumption, the transition to consumption could drive a slight upside to FY24 consensus revenue estimates but a significant upside to FY25.
The analyst found the most critical use case for investors to monitor is the application of C3 solutions to national defense, particularly for aircraft maintenance (the B-1B bomber) and to help keep the nation's nuclear weapons "safe, secure and reliable."
Goodwin maintained his FY23E non-GAAP EPS estimate of ($0.43) (consensus ($0.47)) on revenue growth of 5% (consensus 5%), FY24E non-GAAP EPS estimate of ($0.33) (consensus ($0.33)) on revenue growth of 19% (consensus 20%), and FY25 non-GAAP EPS estimate of $0.25 (consensus $0.01) on revenue growth of 22% (consensus 23%).
The company's premium valuation versus peers reflects its strategic value and the scarcity of pure-play, scaled AI/ML software companies.
Price Action: AI shares closed higher by 1.13% at $22.29 on Thursday.

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