On Thursday, C3.Ai Inc. (ETR:724) shares surged more than 2.5% in the morning before retracting later in the day to trim gains. The company has two conference appearances scheduled for the coming days, which could boost the stock price.
C3 reported its most recent quarterly results last week, beating analyst expectations on earnings. Its fiscal Q1 revenue of $52.4 million also outperformed the consensus Street estimate. However, its guidance for Q2 and full-year revenue was relatively in line with expectations.
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The company will present at the Deutsche Bank Virtual Technology Conference on Friday before heading to the Piper Sandler Virtual Global Technology Conference on Monday. The stock could benefit from a positive response to its presentations after plunging nearly 58% this year.
How long before C3.Ai turns a corner?
From a valuation perspective, C3 shares seem steeply priced based on the price-sales ratio of 25.26. Therefore, value investors could opt for alternatives in the market. However, analysts expect its earnings per share to grow by 25.20% this year before rising further by 12.20% next year. As a result, growth investors could show interest in the stock.
Moreover, C3.Ai also announced at the start of September entering into a deal with Google Cloud. As a result, the company could increase its addressable market by capitalizing on the exposure it gains from the deal.
Therefore, although C3 seems to be facing an uphill task to profitability, its long-term growth potential has several catalysts, including partnerships with leading cloud players.
There is room for more upward movement
Technically, C3 shares seem to be trading under significant bearish pressure in the intraday chart. However, although the stock quickly gave up Thursday’s gains, it still looks poised for an extended upward movement, adding to the 4.5% gains of the last five days.
Therefore, investors can target extended gains at approximately $59.13 or higher at $67.31. On the other hand, a pullback could find solid support at $44.50.
Bottom line: C3.Ai short-term rebound could continue
In summary, although C3.Ai seems substantially overvalued, the stock could continue its upward movement over the last five days based on response to its upcoming presentations.
The company will be revealing to investors its strategic plans for the rapidly growing enterprise AI market. Therefore, Thursday’s late pullback could be an opportunity to buy the stock.
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