UBS Reiterates Neutral on C3.ai, $12 Price Target

UBS analyst Radi Sultan reiterated a Neutral rating and $12 price target on c3.ai (NYSE: AI).

“We caught up with the company ahead of their quarterly quiet period and left feeling incrementally better about the conversion of Fed bookings to revs over the next 12 months but came away with the view that the business needs several more quarters to stabilize and we prefer to remain on the sidelines for now.

While we think the conversion of ~$39m of F1Q27 Fed bookings (vs $16m in F1Q26) to revs supports a return to positive growth in the 3Q/Jan quarter, with the stock trading at ~5.5x our CY27E revs for what may be mid-teens growth next year (very wide range of outcomes), we don’t see much room for the multiple to re-rate higher in the near-term.

The F1Q27 Fed bookings should drive +$5-6m of q/q revs this coming 2Q/Oct quarter, and we believe multiple quarters of material ($3-4m+) q/q revs are needed to restore investor confidence.

In the long-term we think the most compelling growth vector for C3 continues to be on the Fed side (new leadership for C3 brought in here two quarters ago) and it still sounded like the company was still early in identifying use cases for the $450m Air Force contract ceiling through October 2029.

Within our own checks traction with commercial/enterprise customers continues to sound more modest which we believe is a function of more competition from in-house (“DIYed”) alternatives but we do think C3 Code could help here.”

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