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C3.ai, Inc. (NYSE:AI) shareholders should be happy to see the share price up 15% in the last month. But that's small comfort given the dismal price performance over the last year. Like a receding glacier in a warming world, the share price has melted 62% in that period. It's not that amazing to see a bounce after a drop like that. You could argue that the sell-off was too severe.
On a more encouraging note the company has added US$96m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.
See our latest analysis for C3.ai
Because C3.ai made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last twelve months, C3.ai increased its revenue by 38%. That's definitely a respectable growth rate. Unfortunately it seems investors wanted more, because the share price is down 62% in that time. It may well be that the business remains approximately on track, but its revenue growth has simply been delayed. To our minds it isn't enough to just look at revenue, anyway. Always consider when profits will flow.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
C3.ai is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. So it makes a lot of sense to check out what analysts think C3.ai will earn in the future (free analyst consensus estimates)
A Different Perspective
C3.ai shareholders are down 62% for the year, even worse than the market loss of 16%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. With the stock down 2.5% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand C3.ai better, we need to consider many other factors. Even so, be aware that C3.ai is showing 4 warning signs in our investment analysis , and 1 of those is a bit unpleasant...
Of course C3.ai may not be the best stock to buy. So you may wish to see this free collection of growth stocks.