C3.ai will report Q4 results with revenue growth, widening operating loss despite high valuation

From Nasdaq: 2025-05-26 12:46:00

C3.ai, Inc. (AI) will report Q4 fiscal 2025 results on May 28 after market close. Q3 results beat estimates, with revenue up 26% to $98.8 million. Strategic partnerships with Microsoft Azure, Amazon AWS, and McKinsey QuantumBlack drove growth. Operating loss narrowed to $23.1 million.

Estimates for Q4 indicate a loss of 20 cents per share and revenue of $108.3 million, up 25% YoY. AI is expected to see 29.6% revenue growth for fiscal 2025. However, the stock currently has a Zacks Rank #4 (Sell) and a 0.00% Earnings ESP, signaling uncertainty in beating earnings estimates.

C3.ai’s performance in Q4 may be driven by partner-led deals and growing enterprise AI adoption. Despite revenue growth expectations, the company anticipates a wider operating loss due to increased investments in sales and development. The goal is to capture long-term market share, even at the expense of short-term profitability.

C3.ai’s stock has underperformed in the past three months but is trading at a premium compared to its sector. The share price is at a 49.6% discount from its 52-week high. The forward P/S ratio of 6.24X is higher than the sector’s 6.07X. The company’s valuation is at a discount to historical metrics.

While C3.ai shows strong revenue growth, ongoing operational losses and limited earnings visibility raise concerns. The widening operating loss due to increased spending adds to uncertainties. The stock’s premium valuation despite underperformance suggests a risky investment. Investors may find better opportunities elsewhere in the AI sector.



Read more at Nasdaq: C3.ai Gears Up to Post Q4 Earnings: Buy, Sell or Hold the Stock?