On Monday, Piper Sandler adjusted the price target for c3.ai (NYSE:AI), a provider of enterprise artificial intelligence software, to $33.00 from the previous $27.00. The firm has chosen to keep a Neutral rating on the stock.
This move comes after c3.ai reported strong third-quarter revenue and operating margins that surpassed analyst expectations, although these expectations were subdued. The company has revised its full-year 2024 (FY24) revenue guidance and improved the lower end of its margin forecast.
The company's financial performance has been under scrutiny as it adjusted its FY24 margin guidance downward twice this year in successive quarters. In light of these adjustments, the revised revenue guidance and increased margin projections indicate a potential stabilization of c3.ai's financial outlook.
Alongside the earnings report, c3.ai announced a change in its chief financial officer (CFO). Juho Parkkinen is stepping down from the role but will remain with the company as Vice President of Finance. Hitesh Lath, who has been with c3.ai as Chief Accounting Officer since December, will assume the CFO position effective March 1.
The optimism within c3.ai is fueled by growing client interest in AI solutions and an expanding project pipeline, which the company believes will drive higher growth levels. Despite this positive outlook from the company, Piper Sandler has expressed a cautious stance, indicating a desire to see the company's growth potential reflected in actual top-line growth before adopting a more positive view on the stock.
The analyst from Piper Sandler noted that while the recent financial results and management changes are noteworthy, the firm is waiting for evidence of sustained top-line growth before reconsidering their position on the stock. The increased price target to $33.00 reflects a recognition of c3.ai's potential, yet the firm's neutral rating signals a wait-and-see approach to the company's future performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.