C3.ai: Unraveling Financial Health, Competitive Landscape, and Valuation Metrics Amidst Bearish Sentiment

C3.AI (AI) shares declined by 96 cents to $22.60, with option traders showing bearish sentiment. The put/call ratio was 1.17, significantly higher than the typical 0.18. C3.ai's implied volatility increased to 62.77, indicating an anticipated daily price movement of $0.89. The company's revenue growth was 15.8% YoY, but its operating margin stands at -83.39%, and net margin at -74.21%.

C3.ai (AI) shares fell by 96 cents to $22.60 on July 2, 2025, reflecting a bearish sentiment among option traders. The put/call ratio reached 1.17, significantly higher than the typical 0.18, indicating a substantial increase in bearish bets. Implied volatility for C3.ai's stock increased to 62.77, suggesting an anticipated daily price movement of $0.89.

Despite the recent decline, C3.ai reported a 15.8% year-over-year (YoY) increase in revenue, reaching $389.06 million in the past 12 months [1]. However, the company's operating margin stands at -83.39%, and its net margin is -74.21%, indicating significant operational challenges. The company's enterprise value is $2.33 billion, with a market cap of $3.01 billion, and it has 134.39 million shares outstanding [1].

C3.ai's revenue growth was driven by strong partnerships and customer wins. For instance, the U.S. Air Force expanded its contract with C3.ai from $100 million to $450 million in May 2025, and Univation Technologies adopted C3.ai's predictive maintenance capabilities in June 2025 [2]. The company's partnerships with Microsoft and Baker Hughes resulted in 73% of customer agreements being closed by these partners in the 2025 fiscal year [2].

However, C3.ai is not yet profitable and ended the fiscal year 2025 with an operating loss of $324.4 million. The company's free cash flow was negative at -$44.45 million, but it expects to achieve positive free cash flow by next year. C3.ai's current ratio of 6.86 and quick ratio of 6.67 indicate a strong liquidity position, with total assets of $1 billion and total liabilities of $187.6 million [1].

The stock's decline can be attributed to various factors, including the company's unprofitability, the health issue of CEO Tom Siebel, and the anticipated leadership transition. Despite these challenges, C3.ai's strong revenue growth and robust balance sheet make it an attractive investment opportunity for long-term investors. The company's price-to-sales (P/S) ratio has significantly improved, currently lower than Microsoft's, further highlighting its attractive valuation [2].

References:
[1] https://stockanalysis.com/stocks/ai/statistics/
[2] https://www.theglobeandmail.com/investing/markets/markets-news/Motley%20Fool/33838229/is-c3-ai-stock-a-buy/