Key Takeaways
- C3.ai shares jumped 10% after Northland upgraded the stock to Outperform and raised its price target to $16 from $10.
- Northland is betting on easier comparisons starting with the January quarter and on C3 Code, which its analyst calls a “new growth engine.”
- Analysts expect revenue for the year ending April 2027 to fall to $222 million from $250 million, and their average price target was $8.30 as of Sept. 23.
- The upgrade looks early, and the January quarter is the first real test of whether the growth engine shows up in revenue.
C3.ai (AI) shares are up 10% this morning after Northland analyst Michael Latimore upgraded the stock to Outperform from Market Perform before today’s open. He also raised his price target 60%, to $16 from $10.
Northland is betting on C3 Code
Latimore says C3.ai has “found a new growth engine” in C3 Code. He says the tool can shrink the time it takes to build new agentic AI applications to days from months. He also expects the comps to ease, starting with the January quarter.
The comps part is simple math. Revenue was $53.3 million in the quarter ended January 2026, and it has stayed close to that level since. It came in at $51.6 million in the April quarter and $52.4 million in the July quarter, down from $70.3 million a year earlier. Once C3.ai laps those quarters, it only has to hold steady for the year-over-year declines to stop.
The rest of the Street isn’t there yet
Revenue fell 36% to $250 million in the year ended April 2026. Analysts expect it to shrink again this fiscal year, to $222 million, and then recover to just $245 million the year after.
That matches management’s own guidance of $210 million to $240 million for the year ending April 2027.
Analysts’ price targets have also slid all year. The average fell from $14.67 last December to $8.30 as of Sept. 23, which is below where the stock traded even before today’s jump.
The highest target on the Street that day was $12, so Northland’s $16 is a third above it.
Investors are already paying for a recovery
At the last close, C3.ai traded at 8.1x forward sales, right around its five-year average of 8.4x. After today’s jump, it’s closer to 9x.
To be fair, there are early signs of a turn. In the July quarter, bookings rose 73% from the prior quarter, and free cash flow turned positive at $2.1 million.
Still, I think Northland is early. Easier comps will make the year-over-year numbers look better on their own. Before I’d pay an above-average multiple for a growth engine, I’d want to see quarterly revenue climb well above the roughly $52 million it has been stuck near.
The first check is the October quarter, which management guided to $51 million to $55 million. The real test is the January quarter, when the easy comparisons start.
So what is C3.ai stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
