Sign InSummary
As of August 2nd, 2023, C3.ai's stock price dropped by 10.14%, but technical indicators suggest short-term bullish behavior, while mixed news sentiments and potential overvaluation call for a cautious HOLD recommendation.
General Profile and Recent Performances
AI's most recent close, on August 2nd, 2023, was at $39.87, reflecting a significant drop of $4.50 or a 10.14% decrease. Given the day's trading range, this was only slightly above its price low of $38.36 and significantly lower than the day's high of $42.43. As far as its year-long performance, AI has fluctuated between a low of $10.16 and a high of $48.87.
The company C3.ai Inc, trading under the ticker AI on the NYSE, currently has a market capitalization of approximately $4.61 billion. With a significant trading volume of around 29.21 million shares, it just below the average volume of 29.51 million shares. It currently has about 115.61 million shares outstanding.
Stock's Technical Signals
From a technical analysis perspectives, a couple of indicators stand out. The 14-day RSI (Relative Strength Index) for AI stands at 50, which is in the neutral territory. The 50-Day Moving Average is currently at $37.61, and the 200-Day Moving Average is $22.70, indicating a longer-term bullish trend as the current stock price is above both averages. The three-month MACD (Moving Average Convergence Divergence), another momentum indicator, is 1.04, showing a bullish signal.
Fundamental Analysis
On the fundamental side, AI’s EPS (Earnings per Share) currently stands at -$2.35, and the PE (Price-to-Earnings) ratio is -16.97, which indicates that the company is not currently profitable. A discounted cash flow (DCF) analysis estimates the value of the company's stock to be at $42.46. This figure is slightly above the last closing. However, the consensus target price according to analysts' estimates stands around $22.01, with the highest and lowest targets being $31 and $13 respectively, indicating a potential downside risk. The earnings announcement is expected to be on August 29, 2023.
News Sentiments
Recent news sentiments regarding C3.ai seem to be mixed. On one hand, the potential of AI and its projected growth has drawn positive attention to the company. Some reports highlight the company's unique business model. On the other hand, recent news before the last trading day expressed concerns about the investment timing and suggested that now might not be the right time to buy AI's shares.
Prediction
Considering the technical indicators, the current stock price is above both 50-day and 200-day moving averages, with the MACD displaying a positive value. This could suggest continued bullish behavior in the short run. As for the upcoming week, although the price may experience an increase, the analysis of news sentiments indicates potential downward pressure on the price due to mixed sentiments about the company's current valuation.
Final Evaluation
Reflecting on both the technical and fundamental analyses, the stock's current standing, and the consensus target price, the recommendation for the company's shares would be: HOLD. This conservative stance can be justified by the mixed sentiment and the current overvaluation compared to the consensus target price and the company's current EPS and extensive price growth in 2023. Potential investors should cautiously monitor the upcoming earnings announcement before making an investment decision. Current investors in AI might want to keep their holdings until the company's profit potential is validated.
