C3.ai, Inc. (NYSE:AI) missed earnings with its latest first-quarter results, disappointing overly-optimistic forecasters. Statutory earnings fell substantially short of expectations, with revenues of US$70m missing forecasts by 25%. Losses exploded, with a per-share loss of US$0.86 some 38% below prior forecasts. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
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After the latest results, the consensus from C3.ai’s 13 analysts is for revenues of US$310.2m in 2026, which would reflect a considerable 17% decline in revenue compared to the last year of performance. Per-share losses are expected to explode, reaching US$3.20 per share. Before this earnings announcement, the analysts had been modelling revenues of US$420.0m and losses of US$2.32 per share in 2026. So there’s been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.
View our latest analysis for C3.ai
The consensus price target fell 30% to US$15.33, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company’s valuation. Currently, the most bullish analyst values C3.ai at US$25.00 per share, while the most bearish prices it at US$8.00. So we wouldn’t be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 22% by the end of 2026. This indicates a significant reduction from annual growth of 16% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 14% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining – C3.ai is expected to lag the wider industry.
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