C3.ai (AI) Price Target Lowered to $20.00 by DA Davidson Amid Subscription Revenue Decline
DA Davidson has adjusted its price target for C3.ai (NYSE: AI) to $20.00, down from $30.00, maintaining a Neutral rating on the stock. The firm cited a decrease in subscription revenue as the main reason for the adjustment.
C3.ai experienced a significant reduction in subscription revenue quarter-over-quarter, contrasting with previous quarters. Despite this, the company saw growth in professional services, leading to a 21% year-over-year increase in total revenue.
Positive developments in state and local government sectors have been reported, with new customers progressing rapidly through the sales cycle. C3.ai plans to target these and other public sector opportunities aggressively.
The company's federal business is showing positive trends, with the introduction of a new generative AI solution for government programs. C3.ai also plans to expand its sales capacity in North America and Europe while investing in R&D and marketing.
C3.ai reported better-than-expected first-quarter results, with revenue of $87.2 million and an adjusted loss of $0.05 per share. However, investors remain cautious due to a softer outlook for the second quarter and full fiscal year 2025.
CEO Thomas M. Siebel highlighted rising demand for Enterprise AI and the company's solid start to the fiscal year. C3.ai maintains a strong cash position and made significant strides in expanding its market presence.
InvestingPro Insights:
- C3.ai shows resilience with a market cap of $2.92 billion and a revenue growth of 16.41% over the last twelve months.
- The company has more cash than debt, indicating financial stability, and analysts have revised earnings upwards.
- C3.ai is not expected to be profitable this year, and the stock price has experienced significant volatility.
For a more detailed analysis, InvestingPro offers additional tips on C3.ai's financial health and stock performance. Keep an eye on the next earnings date for potential signs of improvement or challenges ahead.
In conclusion, while C3.ai faces challenges with subscription revenue, the company's positive developments and market presence suggest potential for growth. Investors should consider the company's financial stability and stock performance before making investment decisions.