The Consensus EPS Estimates For C3.ai, Inc. (NYSE:AI) Just Fell Dramatically

Market forces rained on the parade of C3.ai, Inc. (NYSE:AI) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

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Following the latest downgrade, the current consensus, from the 13 analysts covering C3.ai, is for revenues of US$323m in 2026, which would reflect a definite 13% reduction in C3.ai's sales over the past 12 months. Losses are supposed to balloon 28% to US$3.20 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$420m and losses of US$2.32 per share in 2026. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for C3.ai

The consensus price target fell 25% to US$16.25, implicitly signalling that lower earnings per share are a leading indicator for C3.ai's valuation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 17% by the end of 2026. This indicates a significant reduction from annual growth of 16% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 13% per year. It's pretty clear that C3.ai's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that C3.ai's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of C3.ai.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with C3.ai, including recent substantial insider selling. For more information, you can click here to discover this and the 2 other concerns we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.