C3.ai reports Q1 revenue estimate slightly below expectations, faces short-term margin pressure

From Nasdaq: 2024-09-02 11:28:00

C3.ai will report its first-quarter fiscal 2025 results on Sep 4, expecting revenues of $84-$89 million with a Zacks Consensus Estimate of $87.12 million. The company aims to diversify its customer base, expand in federal sectors, and grow Enterprise AI software demand. C3.ai faces short-term margin pressure due to a shift to pay-as-you-go models.

C3.ai’s stock has underperformed the Computer & Technology sector and IT Services industry, losing 18.7% year-to-date. With a forward P/S ratio of 7.04X compared to the sector’s 6.27X, the stock is deemed overvalued. Trading below the 50-day and 200-day moving average, a bearish trend is indicated for the AI stock.

C3 Generative AI’s adoption in manufacturing, industrial, and military industries, along with strategic partnerships with tech giants like Microsoft and Amazon, is fueling C3.ai’s growth. The company’s AI solutions have been embraced by companies like Dow and Con Edison, showing strong portfolio performance. C3.ai’s collaborations with cloud partners like AWS and Google Cloud enhance its federal footprint.

Despite strong demand and partnerships, C3.ai’s aggressive investment strategy could keep margins pressured in the near term. With a Zacks Rank #3 (Hold), investors are advised to wait for a better entry point into the stock. Keep an eye on upcoming earnings announcements with the Zacks Earnings Calendar for potential market insights and opportunities.



Read more at Nasdaq: Should You Buy, Hold or Sell AI Stock Ahead of Q1 Earnings?