Key Takeaways
Shares of C3.ai (AI) plunged after the AI software provider posted preliminary financial results that fell well short of the company’s own expectations and that the CEO called “unacceptable.”
The former AI darling’s stock fell over 25% Monday to just above $16. It has lost more than half its value since the year began.
C3.ai said it expects to report an adjusted loss of $57.7 million to $57.9 million, on revenue of $70.2 million to $70.4 million for its fiscal first quarter, down from $87.2 million in revenue the same period a year earlier. In May, the company had guided for revenue of $100 to $109 million. The company is set to release its full results on Sept. 3.
CEO Calls The Numbers ‘Completely Unacceptable’
CEO Tom Siebel called the sales figures “completely unacceptable,” and pointed to disruptions from a reorganization of the company’s leadership and his health as contributing factors to the company’s poor performance.
The company announced in late July that it is actively searching for a successor to Siebel, who said he was diagnosed with an autoimmune disease and has experienced “multiple hospitalizations and vision impairment.”
D.A. Davidson analysts called the results “catastrophic” in a note to clients Sunday, and downgraded C3.ai stock to “underperform” following the results, writing they view “business trends as likely to get worse before they get better.”
Analysts at Wedbush maintained an “outperform” rating for C3.ai stock after the results, but lowered their target to $23 from a Street high of $35 on Monday, calling the sales miss “brutal.”
“It will take lots of time to regain Street confidence and build further momentum in the stock given the weakness in its operational performance,” the Wedbush analysts wrote.