TLDR
- C3.ai’s Q1 FY27 earnings arrive September 2, with analysts projecting $52 million in quarterly revenue and an adjusted loss per share of $0.26.
- DA Davidson’s Lucky Schreiner maintains a Sell recommendation with a $7 target, suggesting potential downside of 35.3%.
- Shares have declined approximately 20% in 2024, despite climbing 11% in the most recent month.
- TipRanks consensus shows a Moderate Sell rating with an average analyst target of $9.29, indicating potential downside of 14.2%.
- The enterprise AI firm reduced its workforce by 35% in 2024 and anticipates approximately $1 million in net new revenue during Q1 FY27.
C3.ai (AI) prepares to unveil its Q1 FY27 financial results after market close this Wednesday, September 2. Shares currently hover near $10.90, reflecting a year-to-date decline of approximately 20%.
Analyst consensus anticipates quarterly revenue reaching $52 million alongside an adjusted per-share loss of $0.26. These figures would mark a year-over-year revenue contraction of roughly 25.7%.
Among the analyst community, DA Davidson’s Lucky Schreiner maintains notably bearish positioning. He’s reaffirmed his Sell recommendation alongside a $7 price objective, suggesting the stock could decline 35.3% from present trading levels.
Schreiner identifies ongoing execution challenges and constrained near-term profit potential as primary concerns underpinning his pessimistic view. He maintains that valuation metrics appear elevated even after the company’s substantial 35% workforce reduction implemented this year.
Recent weeks have brought improved price action, with shares advancing 11% during the past month amid strengthening investor confidence in C3.ai’s software-as-a-service positioning. However, this performance trails the broader data and analytics software industry, which climbed 14.7% across the identical timeframe.
What the Numbers Show
C3.ai’s most recent quarterly disclosure delivered contrasting signals. Revenue totaled $51.6 million, surpassing Street expectations while simultaneously declining 52.5% compared to the prior-year period. The enterprise software provider exceeded projections for adjusted operating income but fell short on billings metrics.
Subscription-based revenue has remained essentially stagnant throughout the previous two reporting periods. Zero revenue has materialized from demonstration licenses, while net new revenue generation continues to disappoint.
Management introduced preliminary FY27 outlook during the previous quarter, forecasting a 10% year-over-year revenue contraction. Current Street consensus estimates approximately $225 million, positioning near management’s guidance midpoint. Schreiner anticipates the company will elevate the lower boundary of its FY27 guidance range following this upcoming report.
What Could Change the Outlook
Tom Siebel has resumed the chief executive position, which Schreiner identifies as potentially constructive. Enhanced sales execution capabilities and elevated professional services revenue represent two domains where Siebel’s leadership could generate meaningful impact.
The company has simultaneously pivoted toward pursuing larger enterprise clients and more sophisticated AI implementation projects. During its pre-quiet period communications, C3.ai indicated that customer appetite for AI capabilities remains robust and clients are developing sharper understanding of the company’s competitive differentiation.
Government and public-sector opportunities represent another avenue Schreiner highlighted as potentially driving future expansion.
Industry peers have delivered varying earnings performances. Elastic posted 15.1% revenue growth, exceeded estimates by 1.7%, and witnessed shares surge 21.8%. Meanwhile, Teradata delivered unchanged revenue, beat forecasts by 3.5%, yet experienced a 23.7% stock decline.
According to TipRanks, AI stock carries a Moderate Sell consensus derived from one Buy rating, three Hold ratings, and five Sell ratings. The $9.29 average price objective suggests potential downside of 14.2% from current trading levels.
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