Because it is not an AI company.
$C3.ai, Inc.(AI)$ nnounced its Q4 results for the 23 fiscal year ending on May 31 after market close.
Revenue was $72.4 million, higher than expected at $71.37 million, with adjusted loss per share of $0.13, better than expected loss of $0.17 per share. Subscription revenue was $560 thousand, accounting for 79% of total revenue.
Non-GAAP gross profit was $530 thousand and non-GAAP gross margin was 9%.
GAAP remaining performance obligations ("RPO") were $381 million, lower than expected at $405 million.
For Q1 FY2024 outlook, revenue is projected to be between US$70-72 million which is basically in line with market expectations of US$71.34m; Non-GAAP losses are estimated to be between US$25-30m;
For the overall outlook FY2024, revenues are projected to be between US$295-300m while market expectations are at US$266m.
Investment Highlights
Were Q4 results ideal? We can only say that there were differences from market expectations. RPO is a target that investors pay more attention to and also represents the potential future performance of the company which led to a significant drop due to underperformance compared to expectations. More importantly, there has been no appearance of business related to AI as anticipated by the market.
In fact,C3.AI is not really an AI stock but rather more like an "intermediary company". When clean energy was popular,it was called C3.Energy; later when IoT became popular it changed its name again into C3.IOTl; now that AI has become popular it changed its name into C3.AI.It's just because AI is trending and they took advantage by using this unique code so they were classified as an AI concept stock. The emergence of ChatGPT will not benefit all software companies, on the contrary, due to AI's improvement in productivity, many so-called software service companies are likely to be replaced by large models and become victims.
Please note that C3.AI was shorted by Kerrisdale Capita earlier this year.
On the other hand, C3.AI's valuation level is not low. Due to its long-term losses, its current PS ratio is as high as 16 times which is far higher than the industry average of 6 times. At the same time, with next fiscal year revenue expectations, the company's forward EV/Sales ratio is as high as 10 times which is higher than the industry average of 5 times.
The reason why this stock has experienced such a volatile rise and fall is because too many shorts have entered causing speculation among retail investors making it a typical "meme" stock.
The short interest rate for this stock reaches up to 29%, so one should also beware of risks from bearish pressure accumulation.
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Comments
I am actually glad this is on a pull back, there are some friends and family I want to get in on S, PLTR, and AI. If your stock is growing at 20%+ with good margins, then you will outperform the S&P, which grows at 8%.
Bulls make money.bears make money. Longs dont forget this becuzz u will see more pumps and dumps wth this stock........ and also the SAme gors for anyone shorting this
This stock will get buy recommendations tomorrow. Shorting the stock? Let’s see what happens tomorrow and Friday. I’m long the future. If I lose, it’s a tax write off. I’m in. I’m invested. I’m long term.
What will happen to AI stock tomorrow ?exactly what should happen! go back up where it belongs. we are all in this for that reason and that reason only!
two company PLTR and AI are the s/w companies have good records.