UBS Raises C3.ai Price Target to $12
UBS analyst Radi Sultan raised the price target on C3.ai (NYSE: AI) to $12.00 (from $9.00) while maintaining a Neutral rating.
“We’d characterize C3.ai’s F4Q26 results as mixed, while q/q revs declined again sequentially (-$1.7m) to $51.6m, the preliminary FY27 revs guide did come in modestly better than investors were expecting at $225m at the midpoint vs investors expecting a range of $200-210m.
The guidance implies continued q/q revs improvement throughout FY27 (when we pressed the company they cited improving pipeline & deal velocity) and we believe the company will likely return to growth in 2H27 albeit on a very easy comp (2H26 revs were down ~50% y/y).
As FY27 will likely be a noisy year given all the moving parts around the restructuring, GTM changes and the return of Tom Siebel as CEO we believe the key question for the stock will be what a return to “normalized” growth looks like (growth in FY28/29).
We leave our FY27/28 revs estimates relatively unchanged at $235m (-6% y/y)/$275m (+17% y/y) vs prior $232m/$273m but would note that the range of outcomes, particularly around FY28 remains wide in our view.
Without more visibility into many of the key growth drivers (license revs, Fed revs ramping, scope of the GTM changes) and the stock not cheap at ~5x our CY27E revs we prefer to remain on the sidelines for now and remain Neutral rated.”
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