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Investing.com - UBS has lowered its price target on C3.ai (NYSE:AI) to $16.00 from $23.00 while maintaining a Neutral rating on the stock following the company’s disappointing fiscal first-quarter results. According to InvestingPro data, the stock has declined over 51% year-to-date, with analyst targets ranging from $10 to $28.
The artificial intelligence software provider pre-announced weaker-than-expected Q1 FY26 results and provided an initial fiscal year 2026 revenue outlook of $290-300 million, representing approximately 24% year-over-year decline at the midpoint, which falls significantly below investor expectations of a 10-15% decrease. Despite current challenges, InvestingPro data shows the company maintains strong financial health with a current ratio of 6.86x and more cash than debt on its balance sheet.
UBS believes C3.ai’s guidance now incorporates conservatism regarding License and Professional Engineering Services revenue, which totaled $27 million in Q1 and is expected to remain relatively flat for the remainder of the fiscal year.
While UBS considers the FY26 numbers to be de-risked, the key question remains whether C3.ai can return to 15-20%+ growth in FY27 and beyond, which UBS believes is possible given the easier year-over-year comparisons coming in FY26.
The stock currently trades at approximately 4.5x calendar year 2027 revenue based on a return to 15-20% growth next year, but UBS maintains its Neutral stance due to limited visibility into revenue dynamics despite already negative market sentiment.
In other recent news, C3.ai reported its fiscal first-quarter results for 2025, revealing a larger-than-expected loss. The company posted an earnings per share of -$0.37, which was below the analysts’ forecast of -$0.20. Revenue for the quarter was $70.3 million, falling short of the anticipated $94.5 million. These financial results have prompted KeyBanc to slash its price target for C3.ai from $18.00 to $10.00, while maintaining an Underweight rating. The reduction in the price target follows a major sales reorganization and health issues affecting CEO Tom Siebel. These developments have been significant for the company and its investors.
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