In This Article:
There's been a major selloff in C3.ai, Inc. (NYSE:AI) shares in the week since it released its third-quarter report, with the stock down 20% to US$23.88. It was a respectable set of results; while revenues of US$99m were in line with analyst predictions, statutory losses were 13% smaller than expected, with C3.ai losing US$0.62 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for C3.ai
Taking into account the latest results, the current consensus from C3.ai's 16 analysts is for revenues of US$472.7m in 2026. This would reflect a substantial 29% increase on its revenue over the past 12 months. Losses are expected to increase substantially, hitting US$2.40 per share. Before this latest report, the consensus had been expecting revenues of US$474.7m and US$2.42 per share in losses.
As a result, it's unexpected to see that the consensus price target fell 14% to US$31.00, with the analysts seemingly becoming more concerned about ongoing losses, despite making no major changes to their forecasts. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic C3.ai analyst has a price target of US$56.00 per share, while the most pessimistic values it at US$15.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that C3.ai's rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 17% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect C3.ai to grow faster than the wider industry.