IB Net Payout Yields Model

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. 

Finviz Chart


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 (NYSE: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, with the goal of boosting revenues over time. My investment thesis is Bullish on the stock trading close to the lows, loaded with cash to build the new pricing model out.

Read the full article on Seeking Alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Update - Dec. 12

The Coupa Software (COUP) buyout for $8 billion is boosting C3.ai due to the massive valuation gap. Coupa was bought at the following multiple while C3.ai trades at only 2x EV/S. 

-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.

Finviz Chart

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