Artificial intelligence-focused concern C3.ai (AI) recently bagged a multi-year contract with the U.S. Department of Defense (DoD) and has also been broadening its footprint across several industries to strengthen its position in the industry. However, the stock has slumped in price over the past year and recently hit its 52-week low after the company posted a disappointing quarterly report. So, is the stock an ideal addition now to one’s portfolio? Let’s discuss.Artificial intelligence-focused software company C3.ai, Inc. (AI) offers software-as-a-service applications for enterprises. The Redwood (NYSE:RWT) City, Calif.-based company recently announced a new five-year Production-Other Transaction Agreement with the U.S. Department of Defense (DoD). “We are thrilled to have been selected for these important initiatives and look forward to expanding our work and finding new ways to better serve the U.S. federal government,” said Thomas M. Siebel, CEO of C3 AI. Furthermore, in its most recent quarter, AI also diversified its enterprise AI production footprint across several industries and continued to innovate with C3 AI Data Vision delivery.
Shares of AI have declined 74.1% in price over the past year and 75.8% year-to-date. Over the past month, the stock has slumped 27% to close yesterday’s trading session at $32.35. In November, a large insider sale amid other factors helped trigger the broader sell-off. CEO Thomas Siebel sold 615,488 shares at prices ranging from $46.96 to $51.20, with his total transaction amounting to $29,762,880.
Despite beating consensus estimates in its last reported quarter and raising its guidance, the stock sold off 17% on the release. And the company’s bottom line remains bleak. Its non-GAAP net loss per share came in at $0.23, versus analysts’ expectations of $0.28. The stock hit its 52-week low of $27.52 on December 2 after the company posted its earnings report. Following that, Bank of America (NYSE:BAC) downgraded the company to Underperform, citing disappointing subscription revenues and a sequential decline in Remaining Performance Obligations. Wedbush lowered its price target to $45 from $70, while J.P. Morgan analyst Mark Murphy slashed his target price to $43 from $53, keeping an Underweight rating. According to some U.S. software analysts, the company’s losses could widen further, and it might take some time for the company to hit its breakeven point and improve margins.