Written by Summary
C3.ai is poised to benefit from a variety of defense and artificial intelligence trends.
The contract with the DoD will support the market legitimacy of C3.ai’s products.
Operational innovations continue to push the company forward into profitability.
With any new enterprise technology vendor, the risks are high.
Valuation can improve at these levels.
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C3.ai Inc. (NYSE: AI ) has amassed an impressive track record and continues to keep its positive momentum. Despite negativity around the stock, the company has achieved significant business updates and record financial highlights. Analysts and retail investors alike have not seen a company like C3.ai, so it’s so far down on their watchlist it is not even on their radar of companies. This is not a tiny startup, but investors will realize the size and importance that C3.ai has to the US Department of Defense. C3.ai Q3 FY 22 Earnings Presentation The financial highlights only encapsulate some of the enormous successes C3.ai has had in the past 12 months. The company is scaling with customers across a variety of industries. Keep in mind that while they may only have 218 customers, major investors have funded the balance sheet. The CEO, Tom Siebel, after he sold Siebel Systems to Oracle in 2005 for 5.8 billion, supported a variety of software ventures and saw the potential in C3.ai. I believe other billionaire investors like him would be willing to back this project now that they have a 500M dollar deal with the Depart of Defense. Artificial Intelligence Contract with the DoD is a Major Milestone
The contract with the Department of Defense and positive political news will prove to be the watershed moment for c3.ai. The company can finally capitalize on its technology in a way that doesn’t interact with any significant technology corporations such as Amazon ( AMZN ) or Microsoft ( MSFT ). The new political developments have given C3.ai the room to operate how they want and still have all the possibilities of a public company. C3.ai Q3 FY 22 Earnings Presentation The 2022 Defense Authorization act will increasingly enable public companies to engage in defense activities. This is not a private-public partnership and is more of an expansion of the US government’s existing relationships with these enterprises. Cybersecurity is crucial to national defense, and having a US native commercial vendor is critical to the success of military operations at home and abroad. C3.ai Q3 FY 22 Earnings Presentation The DoD contract will bring in future revenues and demonstrate to other corporations and governments the proof of work that C3.ai has. Their track record is worthy of note. Going from roughly 60M annually to 50M should shoot up the share price. Instead, C3.ai has been in a structural decline for months. When analysts realize the implications of this contract on the future earnings of C3.ai, they will begin to buy shares in bulk.
Currently, much of the float is owned by institutions. Institutions own 52%, and insiders own 15%. This leaves 33% owned by private investors and the public and shows how much potential insiders have not only to sell shares but give up significant share stakes for institutions to come in. Intelligent Operational Positioning
The operating position the company has put itself in will help boost shareholder confidence and support critical infrastructure across the burgeoning new supply chain. The new works in logistics will look much different than what they were in the previous era, and I believe that as the world becomes increasingly digitized, governments and institutions will need a company that can interact and read that data most efficiently. I view C3.ai, a company dedicated to building and monitoring our natural and digital infrastructure as a leader in this field. Sure many companies can claim that. However, none can say that they have a contract bigger than C3.ai’s. C3.ai Q3 FY 22 Earnings Presentation Margin is one of the most essential parts of a business. C3.ai has high margins due to their recurring revenue stream and technological advantage that few companies offer. These margins will help fuel the lengthy capital investments of various private groups and institutions. Volume-wise, C3.ai may be close to reaching a bottom due to the support from large asset managers. C3.ai Q3 FY 22 Earnings Presentation Expenses continue to grow at rates well within the potential earnings margin growth. At current levels, the expense should not put C3.ai in a vulnerable debt position. Most of the market value is […]
source C3.Ai: Contract With The DoD Is A Shining Bright Spot
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