c3.ai Stock Sinks To 1-Month Low On Analyst’s Sell Call: Retail Stays In Bearish Camp

Enterprise artificial intelligence (AI) software applications company c3.ai, Inc.’s ($AI) shares fell to their lowest level in about a month after an analyst downgraded the stock.

KeyBanc Capital Markets analyst downgraded the Redwood City, California-based company’s stock from ‘Sector Weight’ to ‘Underweight,’ with a $29 price target, TheFly reported.

The new price target suggests the stock could see nearly 30% downside from current levels.

KeyBanc attributed the action to its view that the risk/reward ratio for the stock is unfavorable, given that it traded at 13.3 times its enterprise value compared to the 7.3 times multiple for its growth peers. 

The firm also believes the consensus estimates for fiscal years 2026 and 2027 are too high as the company’s year-over-year (YoY) subscription revenue growth, excluding upfront license, moderated to a negative 1% in the second quarter. 

Furthermore, KeyBanc sees additional risk if the Baker Hughes agreement is not renewed in fiscal year 2026 or if the Microsoft partnership does not yield material results.

Earlier this month, the company reported a beat-and-raise quarter. In the earnings release, c3.ai CEO Thomas Siebel touted the Microsoft partnership as an inflection. point for enterprise AI, driving growth. 

“By establishing C3 AI as a preferred AI application provider on Azure and creating a Microsoft-scale go-to-market engine, we’re making it easy for businesses to adopt and deploy C3 AI applications,” he had said.

AI sentiment and message volume December 19, 2024,  as of 2:29 pm ET | Source: Stocktwits

On Stocktwits, retail sentiment stayed ‘bearish’ (28/100), with the degree of bearishness worsening from a day ago. Message volume remained ‘normal.’

A retail watcher on Stocktwits was positioning for a pullback in the stock to $22.

At last check, c3.ai stock was down 9.95% at $35.74, with the downside accompanied by almost double the average volume.

The stock is up about 38% for the year.

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