C3.ai Sees Rush to $20 Puts as Stock Tumbles 11% After Quarterly Results
$C3.ai (AI.US)$ is seeing increasing demand for put options that could shield shareholders from worsening stock slump after the enterprise AI software company reported fiscal first quarter subscription revenue that missed analyst estimates.
The stock fell as much as 18% to $18.85 on Thursday, the lowest intraday price since early May 2023. The slide came after the company reported a 20% increase in subscription revenue growth to $87.2 million for the quarter that ended July 31. Analysts, on average, expected $79.1 million, according to estimates compiled by Bloomberg. Growth slowed from 41% in the previous three months.
"Deceleration in C3.ai's subscription revenue growth raises questions around its AI-applications and consumption-driven business ramp," Sunil Rajgopal, a senior analyst at Bloomberg Intelligence wrote in a note Wednesday. "With enterprise IT budgets under tight scrutiny, we remain cautious on C3.ai's growth rates."
While shares pared losses to 11% at $20.41 by 12:27 p.m. Thursday in New York, that hasn't damped demand for put options that give the holders the right to sell the stock at $20. Volume for that strike price reached 25,580 so far, the biggest among all put and call options across 12 expiration dates that stretch through Jan. 16, 2026.
![Source: moomoo mobile app](https://ussnsimg.moomoo.com/sns_client_feed/73842169/20240906/1725553912000-c57737f0d8.png/big?area=100&is_public=true)
Almost half of that volume are in contracts expiring next week. That volume so far is already more than 16 times the open interest, which now sits at 660 contracts.
C3.ai forecast revenue in the fiscal year 2025 to reach $370 to $395 million, while loss from operations is seen between $95 million to $125 million.
"We don’t think Q1 or the guidance does much to sway bearish investors with concerns regarding the core
profitability of the business," Canaccord Genuity analyst Kingsley Crane was quoted by Bloomberg as saying. "As it stands now, we may not get evidence to the contrary until at least" fiscal year 2026, he said.
profitability of the business," Canaccord Genuity analyst Kingsley Crane was quoted by Bloomberg as saying. "As it stands now, we may not get evidence to the contrary until at least" fiscal year 2026, he said.
The Canaccord analyst cut his price target on to $23, from $30. That's the second time he lowered it this year, according to Bloomberg data.
![Source: moomoo mobile app](https://ussnsimg.moomoo.com/sns_client_feed/73842169/20240906/1725554197368-541abd6ff0.png/big?area=100&is_public=true)
Still, technical indicators tracked by moomoo are flashing positive signals. Amid Thursday's sell-off, 11 of the 15 gauges, including the relative strength index, are showing the stock could now be oversold and the trend may be turning bullish.
Capital trend data compiled by moomoo showed inflows into the stock outpaced outflows by $33.54 million. That trimmed this month's net outflow to $6.95 million.
(To see the stock's overview, including capital trend data, click here.)
In the fiscal first quarter, the company said agreements closed jumped 122% to 71, including 52 pilots. It also said partner supported bookings expanded 94% from a year ago. While Morgan Stanley analyst Sanjit Singh cited that strong momentum, he said, "with substandard rev growth + op margins, we stick to UW,” referring to his underweight rating on the stock, according to a Bloomberg report.
Share your thoughts on C3.ai or any of your AI-related favorite stock below. And if you have a price forecast for C3.ai, please vote below.
Disclaimer: This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Indexes are unmanaged and cannot be directly invested in. Past performance is no indication of future results. Investing involves risk and the potential to lose principal. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information regarding your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. Moomoo makes no representation or warranty regarding its adequacy, completeness, accuracy, or timeliness for any purpose of the above content. See this link for more information.
Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request. Moomoo does not guarantee favorable investment outcomes. The past performance of a security or financial product does not guarantee future results or returns. Customers should consider their investment objectives and risks carefully before investing in options. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy. All company analysis information is provided by third parties and not by Moomoo Financial Inc. Any illustrations, scenarios, or specific securities referenced herein are strictly for informational purposes and is not a recommendation. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
101550592 :![+1 👍](https://static.moomoo.com/nnq/emoji/static/image/img-apple-64/1f44d.png)
104166257 :![undefined [undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36)
103539497 :![undefined [undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36)
73658129 : daughter. x.