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C3.ai Shares Fall After Fiscal Year Outlook Falls Short of Expectations
C3.ai shares experienced a sharp decline in late trading on Wednesday after the company provided a financial outlook for its fiscal year ending April 2024 that fell short of Wall Street estimates. On Tuesday, the popular AI software play surged 33% but fell 9% during Wednesday’s regular session and another 15% in late trading. Nvidia’s market capitalization has now slipped below $1 trillion, and recent investor favorites Palantir Technologies, SoundHound AI, and C3.ai are all trading in the red after stunning recent moves.
C3.ai’s April Quarter Results
C3.ai is set to release its April-quarter results on Wednesday. The enterprise-analytics software company pre-announced that results would exceed prior guidance, with revenue ranging from $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 estimates called for revenue of $71.3 million and a non-GAAP loss of 17 cents a share, and the Street predicts a GAAP loss of 63 cents a share. The overall business environment for enterprise AI is more active than it has been since the company’s inception, and the interest in applying predictive analytics to business processes has never been greater.
C3.ai’s Future Outlook
While C3.ai’s recent surge indicates its immense potential growth, the question is whether it can grow into its lofty valuation of about 14 times fiscal 2024 estimated sales. Street consensus calls for July quarter revenue of $71.6 million, an increase of just under 10% from a year ago. For fiscal 2024, the Street projects revenue of $317.1 million, a growth of about 19% from fiscal 2023.
C3.ai’s Investigation and Allegations
C3.ai is trading like a meme stock with huge price swings and substantial interest from short sellers. The company completed an investigation of allegations by short sellers Spruce Point Capital Management and Kerrisdale Capital Management and found that none of the allegations or insinuations of wrongdoing made by either party were supported by the facts. As of the close of yesterday, C3.ai shares were up 246% for the year to date.
FAQ:
What is C3.ai?
C3.ai is an AI software company that provides enterprise analytics software.
What was C3.ai’s pre-announcement?
C3.ai pre-announced that results for their April-quarter earnings would exceed prior guidance.
What were C3.ai’s pre-announcement results?
C3.ai’s pre-announcement results found revenue ranging from $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.
What is C3.ai’s estimated valuation?
C3.ai’s estimated valuation is about 14 times fiscal 2024 estimated sales.
What is Street consensus for C3.ai’s July quarter revenue?
Street consensus for C3.ai’s July quarter revenue is $71.6 million, an increase of just under 10% from a year ago.
What allegations were made against C3.ai by short sellers?
Short sellers Spruce Point Capital Management and Kerrisdale Capital Management made allegations of wrongdoing against C3.ai, which were refuted by an internal investigation.
How much have C3.ai’s shares appreciated this year?
As of the close of yesterday, C3.ai’s shares were up 246% for the year to date.
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