C3.ai plunges 20% on wider Q4 loss, slowing sales, analysts worry over deals
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C3.ai (NYSE:AI) shares plunged more than 20% on Thursday after the enterprise software company posted mixed fourth-quarter results and said sales for fiscal 2023 would slow, prompting some analysts to worry about deals being pushed out.
JMP Securities analyst Patrick Walravens, who rates C3.ai (AI) shares market outperform, noted that the performance of its shares have been "extremely disappointing," while also noting deals were pushed out from the fourth-quarter. Walravens also noted that "lower-than-expected" revenue performance obligations, or RPO, of $477.4M, compared to estimates of $489.2M, up 62% year-over-year compared to 90% growth in the previous quarter highlight worries over slowing sales.
C3.ai (AI) shares fell more than 21% to $14.54 in premarket trading on Thursday.
Morgan Stanley analyst Sanjit Singh called out the fact that the "lumpiness" in C3.ai's (AI) business is still a challenge and concerns about deals being pushed into fiscal 2023 "are signs of tougher spend [environment]."
"Lowering [fiscal 2023 revenue] growth outlook shows that [management] is being proactive about de-risking estimates, but a lumpy model + an uncertain macro make it tougher to assess risk/reward in the [near-term]," Singh added.
For the period ending April 30, C3.ai (AI) lost 55 cents per share or 21 cents on an adjusted basis, while generating $72.3M in sales, up 38% year-over-year. Analysts were expecting the company to generate $71.3M in revenue.
Of the $72.3M, $56.3M came from subscriptions, up 31% year-over-year.
However, C3.ai (AI) said fiscal 2023 revenue would be between $308M and $316M, compared to estimates of $339.6M. For the first quarter, C3.AI (AI) expects sales to be between $65M and $67M.
Despite the near-term concerns, JMP Securities, which lowered its per-share price target to $28 from $59, said it believes C3.ai (AI) still has a good longer-term runway ahead of it. 
Walravens cited several reasons, including "an effective, scalable enterprise AI solution that solves problems;" an addressable market that was estimated to be $191B in 2021; a number of opportunities that are still in the early stages, including its partnership with Google (GOOG) (GOOGL) and the federal government; and lastly, the track record of its Chief Executive, Thomas Seibel.
In March, investment firm Morgan Stanley lowered its price target on the C3.ai (AI) to $20 from $31, while maintaining its underweight rating on the stock.