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Artificial intelligence (AI) software company C3.ai (NYSE:AI) will be reporting earnings tomorrow after market close. Here’s what investors should know.
C3.ai beat analysts’ revenue expectations by 3.4% last quarter, reporting revenues of $94.34 million, up 28.8% year on year. It was a strong quarter for the company, with a solid beat of analysts’ EBITDA estimates and full-year revenue guidance slightly topping analysts’ expectations.
Is C3.ai a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting C3.ai’s revenue to grow 25.3% year on year to $98.27 million, improving from the 17.6% increase it recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.25 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. C3.ai has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 1.8% on average.
Looking at C3.ai’s peers in the data and analytics software segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Confluent delivered year-on-year revenue growth of 22.5%, beating analysts’ expectations by 1.7%, and Teradata reported a revenue decline of 10.5%, falling short of estimates by 1.5%. Confluent traded up 25% following the results while Teradata was down 20.3%.
Read our full analysis of Confluent’s results here and Teradata’s results here.
Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market has been optimistic as of late due to a soft landing. This is an economic situation where rate hikes successfully quelled inflation but did not send the economy into a recession. Furthermore, recent rate cuts and Donald Trump's triumph in the 2024 Presidential election have been tailwinds for the market, and while some of the data and analytics software stocks have shown solid performance, the group has generally underperformed, with share prices down 4.8% on average over the last month. C3.ai is down 14.3% during the same time and is heading into earnings with an average analyst price target of $35.93 (compared to the current share price of $26.70).
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