Sign InC3.ai Stock Analysis: Bearish Sentiment and Volatility Raise Caution for Investors
Summary
As of August 11, 2023, C3.ai stock is slightly declining and is categorized as a 'Hold' due to bearish sentiment, negative earnings per share, and upcoming earnings results that could impact its trajectory.
Stock Overview
The stock in question is for C3.ai, Inc. (Ticker: AI), a leading provider of Enterprise AI application software listed on the NYSE. As of the last close on August 11, 2023, the stock price is at $32.94, undergoing a slight drop of -0.54%.
Technical Analysis
The Relative Strength Index (RSI14) stands at 39 which indicates a slightly bearish sentiment. However, it's not in an oversold condition yet which could imply a potential chance for the stock to slide further. The Moving Average Convergence Divergence (MACD; 3-month) is at 0.20, suggesting that short-term momentum is slightly more bullish than long-term momentum. The major support and resistance levels are defined at $32.26 and $34.72 respectively.
Looking at moving averages, the 50-day moving average is at $38.46 compared to the 200-day moving average of $23.54. This indicates that the stock is trading below its short-term average but well above its long-term average, signifying recent downward price action but improved performance over the longer term.
Another technical aspect worth noting is the Average True Range (ATR), measuring market volatility, standing at a high 9.56, suggesting this is a highly volatile stock.
Fundamental Analysis
The underlying fundamentals of the company are represented by its earnings per share (EPS) of $-2.35, which leads to a negative price-to-earnings (PE) ratio of -14.02, indicating a potential lack of profitability. The company's market capitalization is around $3.81 billion with about 115.61 million shares outstanding.
While the discounted cash flow (DCF) value of $35.53 suggests a stock undervaluation, investors should be cautious since the EPS is negative and the stock's high and low target estimates are positioned at $31 and $13 respectively, with a consensus target of $22.01 and a median target of $19.54.
News Updates and Outlook
C3.ai has announced that they will issue their financial results for the fiscal first quarter, ended July 31, 2023, on September 6, 2023. This may provide further material information to the overall outlook of the company's performance. Furthermore, news indicates that despite some reservations, AI stocks are seen to persist in the market, and companies like C3.ai could potentially benefit from this heightened interest in the longer term.
Stock Prediction
Predicting a stock's absolute price point is difficult since it requires complex models. However, the stock may continue its short-term downtrend, especially considering the slightly bearish RSI and its performance relative to the 50-day moving average.
Final Evaluation
Based on the detailed technical and fundamental analysis, and considering the upcoming earnings announcement that could impact the stock's price, it would be prudent to categorize C3.ai as a 'Hold' until the earnings results are available which may provide a clearer direction of the stock's future trajectory. Further, investors should remain cautious due to the high volatility of the stock, reflected by the high ATR. Potential investors are also advised to carefully review the company's ambitious growth projections in light of its current non-profitability.
