Earnings Previews: C3.ai, CrowdStrike, Nordstrom, Salesforce
On Friday, the Dow Jones industrials closed up 1.00%, the S&P 500 up 1.30% and the Nasdaq 2.19% higher. After the first half hour of trading Tuesday morning, the Dow was down 0.31%, the S&P 500 up 0.47% and the Nasdaq up 1.13%.
U.S. markets were closed Monday in observance of the Memorial Day holiday.
After U.S. markets close Tuesday, earnings reports from Box, HP and Hewlett Packard Enterprise are due. Tanker shipping company Frontline reports results before markets open on Wednesday.
Here are previews of four companies reporting quarterly results after markets close on Wednesday.
C3.ai Inc. (NYSE: AI) bills itself as an enterprise AI software company offering a platform and environment that its customers use to build and deploy artificial intelligence applications. Last week, the company announced that its Generative AI Product Suite was available for purchase on the Google Cloud Marketplace.
There is no question that the company has prospered this year from its AI products. The stock price has risen by almost 200%, even more than Nvidia’s rise of around 170%. But C3.ai’s path to prosperity has been bumpier. A short-seller report published in April sent shares down by about 38%. An internal review completed earlier this month found that the short-seller reports were not “supported by the facts.”
Analysts remain cautious on the stock, with six of 12 brokerages rating it at Hold and only two having a Buy or Strong Buy rating. At a recent price of around $33.00, the shares already trade well above their median price target of $18.50 and the high price target of $30.00.
For the company’s fourth quarter of fiscal 2023, analysts expect revenue of $71.34 million, which would be up 7.0% sequentially but down 1.4% year over year. C3.ai is forecast to post a quarterly loss per share of $0.17, compared to the prior quarter’s loss of $0.06 and a year-ago loss of $0.21 per share. For the full fiscal year that ended in April, the loss per share estimate is $0.46, down from a loss per share of $0.73 in 2022, on sales of $265.79 million, up 5.2%.
C3.ai is not expected to post a profit in 2024 or 2025. The stock trades at a 2023 enterprise value to sales multiple of 11.0. For 2024 and 2025, the multiple is 9.2 and 7.7, respectively. The stock’s 52-week trading range is $10.13 to $34.68. The company does not pay a dividend, and total shareholder return for the past year was 79.12%.
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Cloud security platform maker CrowdStrike Holdings Inc. (NASDAQ: CRWD) has seen its share price rise by more than 45% in 2023. But the stock is still down by more than 1.0% over the past 12 months, indicating just how hard tech companies were hit last year. Spending on cybersecurity is rising as businesses beef up their defenses against potential AI attacks, and CrowdStrike is going to have to keep up with competitors like Palo Alto Networks in order to get its share of the work.
Of 46 brokerages covering the firm, 41 have a Buy or Strong Buy rating. At a share price of around $154.00, the upside potential based on a median price target of $165.00 is 7.1%. At the high price target of $235.00, the upside potential is 53.6%.
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