From NASDAQ: 2025-05-20 12:54:00

C3.ai, Inc. (AI) is trading slightly higher than its sector and historical metrics, with a forward 12-month Price/Sales ratio of 6.39X. The stock has gained 20.7% in the past month but lags behind its sector and industry. It currently trades at a 48.6% discount from its 52-week high.

C3.ai’s partnerships with industry leaders like Amazon, Google, and Microsoft have led to significant growth. The company closed 28 deals across nine industries, resulting in a 460% quarter-over-quarter increase. Customer wins include Flex, Sanofi, and the U.S. Department of Defense, showcasing the versatility of its AI solutions.

Despite recent stock price momentum, C3.ai faces challenges with profitability and margin pressures. The company reported a net loss of 62 cents per share in the fiscal third quarter. The cost structure related to pilot deployments is a concern, with over 300 active pilots impacting margins. Investments in sales and R&D are expected to lead to negative free cash flow in the near term.

The Zacks Consensus Estimate for C3.ai’s fiscal 2025 loss per share remains at $2.29, with sales expected to grow by 29.6%. However, the estimate for fiscal 2026 loss per share has widened to $2.41. Despite partnerships and pilot programs, concerns about profitability and operational challenges persist, leading to a Zacks Rank #4 (Sell) rating for C3.ai.

For investors seeking sustainable returns, C3.ai’s current risk-reward profile may be unfavorable given the lack of profitability and ongoing cost structure concerns. While recent stock price gains show momentum, deeper operational issues persist. With a forward Price/Sales ratio above the sector average, caution is advised before investing in C3.ai.



Read more at NASDAQ: C3.ai Trading at a Premium at 6.39X: Time to Hold or Sell the Stock?