C3.aiStock falls after earnings outlook fails to match hype

C3.aiStock falls after earnings outlook fails to match hype

C3.aishares is trading sharply lower on Wednesday after the company provided a financial outlook for its April 2024 fiscal year that fell short of Wall Street estimates.

The popular AI software game, which was up 33% on Tuesday, fell 9% in today’s regular session and lost another 15% in late trading.

This is breaking news. Read a preview of C3.ais earnings below and check back soon for more analysis.

At least for a few hours, the AI ​​stock fever is taking a breather.

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(ticker: NVDA) market cap has dipped below the $1 trillion level and shares in recent investor favorites Palantir Technologies (PLTR), SoundHound AI (SOUN) and C3.ai (AI) are trading in the red after the incredible recent moves in recent sessions.

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But there could be new fodder for AI bettors when C3.ai releases its April quarter results on Wednesday.

The C3.ais report should offer few surprises. About two weeks ago, the business analytics software company announced that the results would surpass previous indications. C3.ai now reports revenue of $72.1 million to $72.4 million, a non-GAAP loss from operations of $23.7 million to $23.9 million, and free cash flow of $18 million to $19 .4 million.

Street’s estimates (which may not have been updated since the announcement) projected revenue of $71.3 million and a non-GAAP loss of 17 cents per share; the Street sees a GAAP loss of 63 cents a share.

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For the fiscal year ended April, C3.ai now sees revenue of $266.5 million to $266.8 million, with a non-GAAP loss from operations of $68.2 million to $68.4 million and negative free cash flow of between $184.2 million and $185.6 million.

The overall business environment for enterprise AI is more active than we’ve seen since the company’s inception and appears to be accelerating, C3.ai said as the pre-announcement was released. The interest in applying predictive analytics to business processes has never been greater.

C3.ai shares jumped 33% on Tuesday, thanks to a combination of continued AI stock craze and the company’s announcement that its AI tools are now available on the AWS Marketplace platform, created by Amazon.
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coms (AMZN) Third-party Amazon Web Services that offers software tools that run on Amazon’s cloud.

The company said Tuesday that availability on AWS speeds up the procurement and onboarding process, allowing customers to quickly access the combined C3.ais and AWS expertise in just a few clicks.

The question now for C3.ai is whether it can grow at its high valuation about 14 times its estimated sales for fiscal 2024. The street consensus forecasts July quarter revenue of $71.6 million, which would be in increase of just under 10% compared to a year ago. For fiscal 2024, Street expects revenue of $317.1 million, up approximately 19% from fiscal 2023.

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C3.ai trades like a meme stock, with huge price swings, while attracting significant interest from short sellers. On the same day the company made its earnings pre-announcement, C3.ai also said it had completed an investigation into allegations made by a pair of short sellers Spruce Point Capital Management and Kerrisdale Capital Management and found that neither of the allegations or insinuations of wrongdoing by Spruce Point or Kerrisdale have been supported by the facts.

C3.ai shares as of yesterday’s close were up 246% year-to-date. The stock fell 12% Wednesday morning, giving back a portion of Tuesday’s huge run amid a broader technology decline.

Email Eric J. Savitz at eric.savitz@barrons.com

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