Why C3.ai Stock Is Plummeting Today
Key Points
C3.ai missed Wall Street's sales and earnings targets for fiscal Q3.
The company plans to lay off roughly 26% of its workforce.
Management's forward guidance was disappointing.
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C3.ai (NYSE: AI) stock is getting hit with big sell-offs in Thursday's daily trading session. The company's share price was down 22% as of 1:15 p.m. ET amid a 1.2% decline for the S&P 500 and a 2% slide for the Nasdaq Composite.
Tech shares are generally under pressure today as investors adjust positions following Nvidia's recent quarterly report and concerns about macroeconomic dynamics, but much of C3.ai's valuation slide is stemming from the company's recent quarterly report. The software and consulting services published _ quarter results after the market closed yesterday, and the print flashed some big warning signs.
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C3.ai's fiscal Q3 results were shockingly weak
C3.ai's revenue came in at just $53.26 million in the third quarter of its current fiscal year, which ended Jan. 31. For comparison, the business had posted sales of $98.78 million in the prior-year quarter. Meanwhile, the average Wall Street analyst estimate called for sales of roughly $76 million in this year's quarter. The company's non-GAAP (adjusted) loss of $0.40 per share in fiscal Q3 also came in significantly above Wall Street's target for a per-share loss of $0.29.
What comes next for C3.ai?
For fiscal Q4, C3.ai is guiding for sales between $48 million and $52 million. Management also anticipates an adjusted operating loss between $56 million and $64 million.
Along with its fiscal Q3 report, C3.ai submitted a regulatory filing that detailed some future plans for the business. The company plans to lay off approximately 26% of its global workforce. The company is also aiming to reduce non-employee costs by 30%. The company's business model seems to be faltering, and pressure is on for a turnaround.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends C3.ai. The Motley Fool has a disclosure policy.
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