C3.ai, Inc

C3.ai, Inc. (NYSE: AI) is an enterprise artificial intelligence (AI) software company. The Company has developed a software application that enables its customers to develop, deploy, and operate large-scale Enterprise AI applications across various infrastructure.

Recent Financial Update:

• Revenue: ai's total revenue for FY23 was USD 273.9 million, an increase of 37% year-over-year. This growth was driven by the increasing adoption of AI across a wide range of industries, as well as by the company's expanding customer base.
• Subscription revenue: Subscription revenue, which is the company's primary source of revenue, was USD 235.8 million in FY23, an increase of 40% year-over-year. This growth was driven by the continued expansion of C3.ai's customer base, as well as by the company's success in upselling and cross selling its products and services to existing customers.
• Gross margin: ai's GAAP gross margin for FY23 was 66%, and non-GAAP gross margin was 74%. This was a slight improvement on the company's gross margin in FY22. The improvement in the gross margin was driven by the company's focus on increasing the efficiency of its operations.
• Net loss: ai's GAAP net loss per share was USD (1.13) in FY23, and non-GAAP net loss per share was USD (0.25). The company's net loss widened in FY23 due to higher research and development expenses. However, the company's non-GAAP net loss per share was narrower than expected, which was due to the company's strong revenue growth.
• Customer count: ai had 288 customers at the end of FY23, an increase of 24% from the end of FY22. The company's customer base growth was driven by its strong sales and marketing efforts, as well as by its success in expanding its application footprint to existing customers.
• Cash reserves: ai had USD 814.9 million in cash, cash equivalents, and investments at the end of FY23. This strong cash position provides the company with the financial resources to continue to invest in its growth initiatives.

Technical Observation (on the daily chart)

The stock price has given an impressive return over the past year, with a return of 99.01%, indicating an uptrend trend. This uptrend trend is also evident in the medium-term, with a return of 218.51% in the previous six months. The price has broken above an important resistance of USD 30 - USD 35, after the announcement of FY23 financial results. The momentum indicator RSI (14 period) currently stands at 64.59, correcting from overbought level, suggest some short-term consolidation or correction. It is worth noting that the price is currently trading above both the 21-day and 50-day SMA trend-following indicators, and these SMAs will act as short-term supports in case of correction.  

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is June 06, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

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