AI short pitch:
– Hyped-up consulting firm disguised as an “Enterprise AI Platform”.
– Stock is up 125% YTD following a vague/nonsensical AI-related press release.
– AI has a hugely unprofitable generic business with promotional management who have a history of pumping the stock.
– Business has also been performing poorly over the last two quarters with negative sequential QoQ revenue growth.
– Management guides for even larger operating losses next quarter.
– ~30 VP+ executives have left the company since 2021.
AI valuation:
– Trades at 6-7x NTM revenue with no/negative growth down the line.
– Expected to trade at 2-3x revenue in a bullish scenario, 0 in a bearish scenario.
Exp. gain: 50-100%
Full write-up (free guest account required):
https://www.valueinvestorsclub.com/idea/C3.AI_INC/4524468169