C3.ai (NYSE:AI) stock is sliding on Monday after Wolfe Research hit the company’s shares with a downgrade.
Wolfe Research analyst Joshua Tilton downgraded shares of AI stock from a “market perform” rating to an “underperform” rating. To put that in perspective, the analyst consensus rating for AI stock is a “hold” based on 11 opinions.
To go along with that downgrade, Tilton set a price target of $14 per share for AI stock. That represents a potential downside of 30.2% based on Friday’s close. It’s also below the analyst consensus price target of $20 per share.
Why the Bearish Stance on AI Stock?
The Wolfe Research analyst said the following about AI stock in a note to clients obtained by CNBC:
“Excluding the BKR-related revenue, we lack confidence in underwriting higher revenue growth for FY24 as it would imply a step up in non-BKR-related revenue despite C3.ai customer count growth slowing significantly in FY23, which we believe either implies longer renewal cycles or elevated churn levels in its existing customer base.”
As far as AI stock movement today goes, some 1.4 million shares have changed hands as of this writing. That’s weak compared to its daily average trading volume of about 27 million shares. Additionally, shares of AI stock are down 9.2% as of Monday morning.
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.