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On Thursday, Canaccord Genuity adjusted its price target for C3.ai (NYSE:AI), a leading enterprise AI software provider, to $30 from the previous $40, while maintaining a Hold rating on the company’s shares. The revision reflects a cautious stance on the company’s financial performance, as noted by the firm’s analysts. According to InvestingPro data, analyst targets for C3.ai currently range from $15 to $56, highlighting the wide divergence in market expectations.
C3.ai’s stock has seen a decline in the previous quarter, with concerns about the company’s continued cash burn and the potential for growth moderation in upcoming quarters. These factors could impact the stock’s valuation multiple, which has prompted Canaccord Genuity to reassess its position. InvestingPro data shows the stock has declined 23.21% year-to-date, despite maintaining strong revenue growth of 21.73% over the last twelve months.
The analysts at Canaccord Genuity emphasized the importance of growth prospects in their valuation methodology but also highlighted that profitability remains a significant factor. The new price target is based on approximately 7 times the projected CY26E sales, a decrease from the earlier estimate of around 10 times. While C3.ai maintains a strong balance sheet with a current ratio of 7.52, InvestingPro analysis indicates an overall WEAK financial health score, with 12 additional insights available to subscribers.
The firm’s decision to reiterate a Hold rating indicates a neutral outlook on C3.ai’s stock, suggesting that the analysts do not currently see significant upside or downside potential from the stock’s last closing price.
C3.ai has been navigating a challenging market environment, with its financial health being closely monitored by investors. The updated price target from Canaccord Genuity reflects the latest available data and market conditions as they relate to the company’s performance and potential future growth trajectory.
In other recent news, C3.ai announced its third-quarter fiscal year 2024 earnings, reporting non-GAAP earnings per share of ($0.12), surpassing the consensus estimate of ($0.25). The company achieved revenue of $98.8 million, slightly above the forecasted $98.1 million, marking a 26% increase from the previous year. Despite these positive results, the company’s guidance for the fourth quarter and full fiscal year 2025 did not meet investor expectations, with projected Q4 revenue between $103.6 million and $113.6 million, aligning closely with Wall Street estimates. C3.ai expects full-year revenue to range from $383.9 million to $393.9 million, compared to the consensus of $388.3 million. Citizens JMP analyst Patrick Walravens adjusted the stock’s price target to $50.00 from $55.00 while maintaining a Market Outperform rating. The company highlighted expanded partnerships with Microsoft (NASDAQ:MSFT), AWS, and McKinsey QuantumBlack, closing 66 agreements in the quarter, including 50 pilots. Subscription revenue, accounting for 87% of total revenue, increased 22% year-over-year to $85.7 million. C3.ai ended the quarter with $724.3 million in cash and marketable securities, despite experiencing a larger-than-expected free cash flow deficit of ($22.4 million).
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