C3ai (AI) AI Stock Analysis

• Market Cap: $1.42B
• Dividend Yield: N/A
• Average Volume (3M): 6.58M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.05
• Revenue Growth: 1.84%
• EPS Growth: -27.74%
• Country: US
• Employees: 891
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): -0.40
• Shares Outstanding: 137,253,300
• 10 Day Avg. Volume: 5,089,517
• 30 Day Avg. Volume: 6,578,609
• PEG Ratio: 2.30
• Price to Book (P/B): 3.39
• Price to Sales (P/S): 7.30
• P/FCF Ratio: -63.93
• Enterprise Value/Market Cap: 0.93
• Enterprise Value/Revenue: 4.31
• Enterprise Value/Gross Profit: 9.93
• Enterprise Value/Ebitda: -3.02
• 1Y Price Target: $9.11
• Price Target Upside: -9.97% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 12
• EPS Forecast (FY): -1.2
• Revenue Forecast (FY): $298.73M

• Rating: 47 Neutral
• Price Target: $10.00 ▼(-1.19% Downside)
• Action: Reiterated Date: 02/26/26
• Date: Action: Reiterated 02/26/26

The score is held down primarily by weak financial performance (revenue contraction, materially worse margins, large losses, and continued cash burn). Technicals add further pressure with a clear downtrend and negative momentum signals. The earnings call provides some offset via improving bookings and partner-driven pipeline strength, but guidance and ongoing losses limit the uplift, while valuation remains constrained by negative earnings and no dividend support.

Positive Factors

Partner Ecosystem Expansion

Material growth in joint qualified pipelines with Microsoft and AWS signals durable go-to-market leverage. Deepening platform integrations can lower customer acquisition costs, scale distribution, and accelerate enterprise deployments across industries for months to years, strengthening recurring revenues.

Federal Bookings Momentum

Rapid federal, defense and aerospace bookings (89% YoY and 45% share) provide sticky, contract-driven demand and higher sales visibility. Government engagements often yield multi-year, recurring work and favour certified commercial-off-the-shelf solutions, supporting steadier top-line over the medium term.

Conservative Balance Sheet

Extremely low leverage gives the company financial flexibility to fund R&D, partner initiatives, or restructuring without material refinancing risk. A strong cash/debt profile supports multi-quarter operational adjustment and reduces near-term solvency concerns despite ongoing losses.

Negative Factors

Revenue Contraction & Margin Compression

Significant TTM revenue decline coupled with a steep gross margin drop signals weakening product monetization or higher delivery costs. Lower gross margins reduce long-term operating leverage and make achieving sustainable profitability harder without durable revenue recovery or structural cost changes.

Large Losses and Negative Cash Flow

Deep negative operating and free cash flow alongside very large net losses indicate persistent cash burn that undermines self-funding. Even with year-over-year FCF improvement, continued deficits pressure capital resources, raising dilution risk or limits to funding strategic investments over the medium term.

Restructuring & Workforce Reduction

A 26% workforce reduction and major cost-savings plan reflect prior cost structure and demand stress. While intended to preserve runway, such cuts can impair delivery capacity, slow new customer onboarding, and signal structural revenue pressure, raising medium-term execution and growth risks.

C3ai Business Overview & Revenue Model

Company Description

C3.ai, Inc. operates as an enterprise artificial intelligence (AI) software company in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. It provides C3 AI application platform, an application development and runtime environment that enables customers to design, develop, and deploy enterprise AI applications; C3 AI Ex Machina to for analysis-ready data; C3 AI CRM, an industry specific customer relationship management solution; and C3 AI Data Vision that visualizes, understands, and leverages the relationships between data entities. It also offers C3 AI applications, including C3 AI Inventory Optimization, a solution to optimize raw material, in-process, and finished goods inventory levels; C3 AI Supply Network Risk, which provides visibility into risks of disruption throughout the supply chain operations; C3 AI Customer Churn Management, which enables account executives and relationship managers to monitor customer satisfaction, as well as to prevent customer churn with AI-based and human-interpretable predictions and warning; C3 AI Production Schedule Optimization, a solution for scheduling production; C3 AI Predictive Maintenance, which provides insight into asset risk to maintenance planners and equipment operators; C3 AI Fraud Detection solution that identify revenue leakage or maintenance and safety issues; and C3 AI Energy Management solution. In addition, it offers integrated turnkey enterprise AI applications for oil and gas, chemicals, utilities, manufacturing, financial services, defense, intelligence, aerospace, healthcare, and telecommunications market segments. It has strategic partnerships with Baker Hughes in the areas of oil and gas market; FIS in the areas of financial services market; Raytheon; and AWS, Intel, Google, and Microsoft. The company was formerly known as C3 IoT, Inc. and changed its name to C3.ai, Inc. in June 2019. C3.ai, Inc. was incorporated in 2009 and is headquartered in Redwood City, California.

How the Company Makes Money

C3.ai generates revenue primarily through a subscription-based model, where customers pay for access to its AI software and services. This includes licensing fees for the C3 AI Suite and associated applications, which can be tailored to specific organizational needs. Additionally, the company earns revenue from professional services, including implementation, customization, and support for its software solutions. Strategic partnerships with major firms and technology providers enhance its market reach and credibility, contributing to its earnings. C3.ai also benefits from long-term contracts with clients, ensuring a steady revenue stream as they continue to integrate AI into their operations.

C3ai Financial Statement Overview

Summary

Overall fundamentals are pressured by a TTM revenue decline (-12.9%), sharply lower gross margin (~43% vs ~61% in FY2025), and very large losses (TTM net margin about -141%). Cash flow remains negative (TTM operating cash flow and free cash flow both deeply negative), although free cash flow improved versus the prior year. The balance sheet is a relative strength with effectively minimal debt, but equity/assets trending down and deeply negative returns reflect ongoing value erosion.

Income Statement

TTM (Trailing-Twelve-Months) results show a sharp step-down in revenue (down 12.9%) and materially worse profitability, with a gross margin falling to ~43% from ~61% in FY2025. Losses remain very large relative to sales (net margin about -141% in TTM), and operating losses widened versus FY2025, signaling elevated cost intensity. A positive is the company has historically grown revenue in prior years, but the latest TTM reversal and weakening margins drive a low score.

Balance Sheet

The balance sheet is a relative strength: debt is effectively minimal (TTM shows zero total debt; FY2025 debt-to-equity was ~0.006), providing strong financial flexibility and low refinancing risk. However, equity and assets have trended down from FY2021 to TTM, and returns remain deeply negative (TTM return on equity around -47%), reflecting ongoing value erosion from sustained losses. Overall leverage is very conservative, but profitability pressure is weighing on the capital base.

Cash Flow

Cash generation remains weak with negative operating cash flow and negative free cash flow in TTM (roughly -$125M and -$127M, respectively), implying continued cash burn to fund operations. A modest positive is that free cash flow has improved versus the prior year (TTM growth shown as +36%), suggesting some progress in cash discipline, but the company is still not self-funding and the burn rate is meaningful.

Breakdown	TTM	Apr 2025	Apr 2024	Apr 2023	Apr 2022	Apr 2021
Income Statement
Total Revenue	307.39M	389.06M	310.58M	266.80M	252.76M	183.22M
Gross Profit	133.57M	235.86M	178.56M	180.46M	189.05M	138.70M
EBITDA	-439.66M	-311.82M	-306.92M	-284.40M	-190.93M	-55.96M
Net Income	-434.50M	-288.70M	-279.70M	-268.84M	-192.06M	-55.70M
Balance Sheet
Total Assets	895.78M	1.03B	1.04B	1.10B	1.17B	1.20B
Cash, Cash Equivalents and Short-Term Investments	621.92M	742.69M	750.37M	730.98M	960.16M	1.09B
Total Debt	0.00	4.79M	3.23M	2.34M	3.61M	3.89M
Total Liabilities	176.30M	187.58M	164.87M	173.36M	181.41M	135.30M
Stockholders Equity	719.47M	838.30M	873.35M	929.66M	989.48M	1.06B
Cash Flow
Free Cash Flow	-127.05M	-44.45M	-90.37M	-187.21M	-90.75M	-39.18M
Operating Cash Flow	-124.52M	-41.41M	-62.36M	-115.69M	-86.46M	-37.55M
Investing Cash Flow	74.09M	16.40M	-66.61M	59.95M	317.01M	-767.15M
Financing Cash Flow	15.26M	22.22M	11.29M	621.00K	5.71M	887.36M

C3ai Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 10.12
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AI, the sentiment is Negative. The current price of 10.12 is below the 20-day moving average (MA) of 10.92, below the 50-day MA of 12.62, and below the 200-day MA of 18.28, indicating a bearish trend. The MACD of -0.72 indicates Negative momentum. The RSI at 39.82 is Neutral, neither overbought nor oversold. The STOCH value of 30.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AI.

C3ai Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
G	73 Outperform	$6.54B	12.12	22.37%	1.41%	7.40%	-14.45%
EPAM	68 Neutral	$7.12B	19.47	10.34%	―	14.26%	-15.49%
GLOB	67 Neutral	$1.86B	19.69	4.91%	―	5.56%	-42.38%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
CNXC	49 Neutral	$1.87B	-1.51	-37.82%	3.38%	3.40%	53.13%
AI	47 Neutral	$1.42B	-3.64	-46.77%	―	1.84%	-27.74%
BBAI	46 Neutral	$1.70B	-2.77	-111.83%	―	-6.95%	-53.69%

C3ai Corporate Events

C3 AI Announces Major Restructuring to Cut Operating Costs

On February 24, 2026, C3 AI’s board approved a restructuring plan aimed at materially improving operating efficiency, including a 26% global workforce reduction that is largely complete and a roughly 30% cut in annualized non-employee costs targeted by the second half of fiscal 2027. The company expects to incur $10 million to $12 million in pre-tax restructuring charges in the fiscal 2026 fourth quarter and projects about $135 million in annual non-GAAP operating expense savings, though management cautioned that actual charges and timing could vary.

For its fiscal third quarter ended January 31, 2026, C3 AI reported $53.3 million in revenue, with subscriptions contributing 90% of the total, a 17% GAAP gross margin, and a GAAP net loss of $0.94 per share, supported by $621.9 million in cash and marketable securities. The company highlighted strong momentum in federal, defense, and aerospace bookings, new and expanded agreements with major government and commercial customers, and initial production deployments of its generative AI offerings, while guiding to lower fourth-quarter revenue of $48 million to $52 million and a continued non-GAAP operating loss for fiscal 2026.

The most recent analyst rating on (AI) stock is a Hold with a $9.50 price target. To see the full list of analyst forecasts on C3ai stock, see the AI Stock Forecast page.