2024-03-15 14:00:00 ET
Summary
- C3.ai remains overly lofty here, despite the raised FY2024 guidance, growing customer engagement, and long-term generative AI tailwinds.
- Management's overreliance on stock-based compensation and share dilution make its investment thesis unattractive here, well negating the SaaS company's high-growth prospects.
- This is further worsened by C3.ai's uncertain profitability trajectory and eye-watering short interest, with any stock gains likely to be lost as quickly.
- If anything, C3.ai needs to consistently offer promising forward guidance while beating consensus estimates to maintain its relatively stretched valuations, something that remains to be seen.
- As the market momentum approaches extreme greed with a potential near-term market-wide pullback, we believe that it may be more prudent to maintain our Hold (Neutral) rating here.
We previously covered C3.ai ( AI ) in December 2023, highlighting its improved near-term prospects, attributed to the reduced sales friction with lower average contract value (lower price points) and shorter sales cycle....
Read the full article on Seeking Alpha
For further details see:
C3.ai: In Overdrive, The High Growth Narrative Is Not Compelling Enough