C3.ai (AI): Evaluating Valuation After Withdrawn Guidance, CEO Change, and Legal Scrutiny

C3.ai (AI) just delivered a tough set of quarterly results, reporting revenue and profitability that fell short of expectations and withdrawing its full-year guidance. The company also named a new CEO, Stephen Ehikian, while at the same time facing a wave of class action lawsuits alleging it misled investors about its financial health and the effects of leadership changes. For investors, these events paint a picture of a company in the midst of major upheaval and raise fresh questions about its path forward.

All of this has weighed heavily on C3.ai’s share price. Over the past year, the stock has dropped around 29%, with a sharper retreat in the past 3 months. The latest results have only deepened negative sentiment, as cautious investors digest not just missed numbers but also broader uncertainty about C3.ai’s competitive positioning and execution after a high-profile executive transition. The combination of sagging revenue, legal scrutiny, and aggressive rivals has clearly shifted the narrative around this stock in recent months.

So after a year of significant decline and heightened doubt, is the current share price a bargain or are markets accurately bracing for further challenges ahead?

Most Popular Narrative: Fairly Valued

According to the most popular narrative, C3.ai is fairly valued, with new analysis reflecting a sharp reset in expectations for growth and future profitability.

"C3.ai withdrew full-year fiscal 2026 guidance in light of CEO transition and sales/service restructuring. The company now provides Q2 fiscal 2026 revenue guidance of $72-80 million. Stephen Ehikian was appointed Chief Executive Officer, succeeding Thomas M. Siebel, who will remain Executive Chairman. The transition follows Siebel's diagnosis with an autoimmune disease and significant visual impairment."

Curious about the dramatic shifts in C3.ai's value? Analysts have overhauled major assumptions, with future growth and profit forecasts taking center stage. What numbers are really driving this fair value call? Is it steady cash flow, new leadership traction, or something else entirely? Get ready for some surprises if you dig into the full narrative behind this market verdict.

Result: Fair Value of $16.25 (ABOUT RIGHT)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent revenue declines and ongoing dependence on partner-led sales could undermine C3.ai’s growth story and could weigh on future profitability.

Find out about the key risks to this C3.ai narrative.

Another View: What Does Our DCF Model Say?

While the first approach relies on price-to-sales ratios, our DCF model tells a different story. This method suggests that fair value could be even further out of reach than the multiple implies. Could this signal a bigger problem, or perhaps an overlooked opportunity?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out C3.ai for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own C3.ai Narrative

If you have a different perspective or want to dive into the numbers yourself, you can build your own C3.ai story in just a few minutes with our tools. Then make it your own Do it your way.

A great starting point for your C3.ai research is our analysis highlighting 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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