C3.ai Inc (AI), an enterprise AI company, is generating significant buzz ahead of its fiscal first-quarter earnings report, due after the market closes on Wednesday. Here’s a breakdown of what to expect:
Financial Expectations:
Analysts are anticipating a loss of 13 cents per share on revenue of $86.942 million for the quarter, according to Benzinga Pro estimates. C3.ai has a track record of exceeding analyst expectations, having achieved this in 11 out of the last 13 quarters. In the previous quarter, the company reported its fifth consecutive quarter of accelerating revenue growth, with revenue hitting $86.6 million, surpassing estimates of $84.395 million and representing a 20% year-over-year increase. The company also reported a loss of 11 cents per share, beating analyst expectations for a loss of 30 cents per share.
Focus on Growth and Margins:
Investors and analysts will be closely watching C3.ai’s top-line growth, margins, and the company’s pipeline of potential deals. While the company has touted its strong interest in its generative AI applications, analysts are eager to see how this translates into tangible growth. Last quarter, Piper Sandler analyst Arvind Ramnani expressed a desire to see the robust interest in the company’s AI solutions translate to higher growth levels. DA Davidson analyst Gil Luria also raised concerns about potential pressure on gross margins as the company scales its AI pilots.
Share Price Volatility:
C3.ai shares have significantly underperformed other AI-linked stocks since the beginning of the year. However, the stock is experiencing some volatility heading into earnings. The stock saw a surge in early trading on Wednesday before pulling back and turning negative. Notably, C3.ai stock is trending on Reddit’s r/WallStreetBets, with retail investors highlighting the high short interest in the name. Currently, 25.73% of C3.ai’s float is sold short, according to Benzinga Pro data.
Key Takeaways:
C3.ai’s earnings report is anticipated to be a key event for the company and the broader AI sector. Investors will be looking for signs of continued revenue growth, margin improvements, and a robust pipeline of deals. The high short interest in the stock suggests potential for volatility in the days leading up to and following the earnings release.
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