By Senad Karaahmetovic
Shares of C3.ai Inc (NYSE:AI) are down over 15% after the company reported FQ1 results and offered guidance.
C3.ai reported an FQ1 loss per share of $0.12 on revenue of $65.3 million, which compares to the expected loss per share of $0.24 on revenue of $66.02 million.
For the ongoing quarter, C3 sees FQ2 revenue in the range of $60 million to $62 million, a relatively big miss compared to the $71.7 million consensus. The company also guided down as it now expects to generate between $255 million and $270 million in full-year revenue, down from the prior range of $308.0 million to $316.0 million and again much lower than the $310.58 million consensus.
A Morgan Stanley analyst cut the price target by $1 to $13 to reflect lowered outlook.
“The FY23 rev growth outlook was lowered to ~4% from 20%+ prior on a wave of deal push-outs and by a surprising transition to consumption pricing. We think the move to consumption could help AI better penetrate its growth oppty LT but this would come at the expense of revenue in the NT,” the analyst said in a client note.
A Piper Sandler analyst also slashed the price target as he went to $14 from $18 on the Neutral-rated shares.
“The company's lowered revenue target is disappointing because initial guidance was already modest; however, we view increased focus on margins as positive. We remain on the sidelines given the business model is in transition; and client traction and usage trends add increased uncertainty. We maintain our Neutral rating,” he told clients in a note.