C3.ai is predicting less revenue than Wall Street expected for both the July quarter and its fiscal year.
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C3.ai’s inability to meet Wall Street’s expectations is damaging its credibility, according to Wedbush analysts, but Needham is taking a more positive view.
“This quarter along with soft guidance was another debacle that takes C3 one step backwards on its turbulent tornado-like journey in our opinion,” Wedbush analyst Daniel Ives wrote in a research note Thursday morning. “We are maintaining our NEUTRAL rating while lowering our price target from $16 to $13 reflecting lowered estimates.”
Since the company’s initial public offering in 2020, C3.ai has struggled toperform to Street expectations, which is “continuously damaging the company’s credibility in the eyes of the Street,” he said. C3.ai didn’t immediately respond to a request for comment early Thursday morning.
The stock was down 22% in premarket trading to $14.32. The shares sold off Wednesday evening after the company issued a downbeat financial forecast for its July quarter. C3.ai (ticker: AI) sees revenue of $65 million to $67 million, below the FactSet consensus call for of $74.4 million. For fiscal 2023, management forecast revenue of $308 million to $316 million, below the previous consensus call of $333.9 million.
Needham analyst Mike Cikos was more upbeat.
“C3.ai is delivering the combination of a differentiated/patented platform with an expansive TAM [total accessible market] that addresses [the] largest markets,” Cikos wrote in a research note Thursday morning. He also said the lower forecast was in response to big-picture developments.
“The company is not seeing an impact on its business from the changing macro environment, but thought it prudent to ‘set market expectations conservatively,’” he said.
Shares of C3.ai have fallen 42% so far this year, while the tech-heavy Nasdaq Composite Index is down 24%.
Write to Logan Moore at [email protected].
