C3.ai Rebuild Starts Now
Update - Feb. 3
C3.ai is up over 100% in a month and an analyst comes out with a $30 PT. Where was this analyst at $10??? The stock is getting very frothy here. -C3.ai (NYSE:AI) continued its surge to start 2023, gaining 15% on Friday, as investment firm D.A. Davidson & Co. started coverage on the artificial intelligence software company, calling a "truly scarce asset."-Analyst Gil Luria initiated coverage on C3.ai (AI) with a buy rating and a $30 per-share price target, implying some 20% from current levels.
Update - Jan. 31
C3.ai has surged to $20 based on solely implementing ChatGPT and offerings from Google into their AI products. Investors shouldn't chase this rally.
- C3.ai (NYSE:AI) shares jumped nearly 19% in early trading on Tuesday after the Thomas Siebel-led company announced it was introducing a new artificial intelligence focused product suite.
- The new suite, known as C3 Generative AI Product Suite, uses natural language to "rapidly locate, retrieve, and present all relevant data across the entire corpus of an enterprise’s information systems."
- C3.ai (AI) added that the suite integrates other AI systems, including Open AI's ChatGPT, as well as offerings from Google (GOOG) (GOOGL) and academics, into its enterprise AI products.
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
-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.
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