C3.ai Rebuild Starts Now
Update - Jan. 27
C3.ai pretty much closed the gap to $18 today. The easy money has been made, but the stock sill has upside into the high $20s.
Update - Dec. 21
$AI isn't going to be sold unless a PE firm wants to offer $30+ and still doubt the CEO would sell.
-LiveRamp (NYSE:RAMP), C3.ai (NYSE:AI), Varonis Systems (NASDAQ:VRNS), PagerDuty (NYSE:PD) and Couchbase (NASDAQ:BASE) screened as the most likely takeover targets for private equity firms, according a Morgan Stanley analyst.-Although 2022 M&A activity has fallen overall, the year has been a record one for PE-backed software deals, Morgan Stanley analyst Keith Weiss wrote in a note on Thursday. Eleven transactions have been announced this year with the multiples paid at an average of 10.4X TTM sales.-The multiples paid this year are higher than the ~7.5x paid for PE-back deals since Morgan Stanley began tracking them in 2013 and 5 out of the 6 most expensive multiples ever paid by PE for public software companies occurred in 2022, according to Morgan Stanley's Weiss.
Original article posted on Dec. 8.
- C3.ai reported mixed FQ'23 earnings results, with revenues down sequentially.
- The enterprise AI software company has made great progress in the shift to a consumption-based pricing model, with a few more quarters need for the revenue ramp to begin.
- The stock trades at just 2x EV/S targets.
- This idea was discussed in more depth with members of my private investing community, Out Fox The Street. Learn More »
From the outside, C3.ai () is increasingly difficult to value based on the shift to the consumption-based pricing model. The enterprise AI application software company will now boost the amount of customers while reducing the total contract values, withinvestment thesis
-Recent conversation with investors indicates Coupa (COUP) could see a price of $75-$80 a share in a takeout, (~8x NTM Sales), Morgan Stanley analysts led by Keith Weiss wrote in a Thursday note. Based on a ~10x NTM sales multiple, there's a "reasonable framework" for Coupa to see ~$100 share in a possible takeover.