The entity reports 29.75
M of total liabilities with total debt to equity ratio (D/E) of 0.03, which may suggest C3Ai Inc is not taking enough advantage from financial leverage. The firm has a current ratio of 8.07, indicating that it is in good position to pay out its debt commitments in time. Debt can assist C3Ai Inc until it has trouble settling it off, either with new capital or with free cash flow. So, C3Ai Inc's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like C3Ai Inc Cl sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for C3Ai Inc to invest in growth at high rates of return. When we think about C3Ai Inc's use of debt, we should always consider it together with cash and equity.
The firm owns a Beta (Systematic Risk) of 2.3817, which signifies a somewhat significant risk relative to the market. Let's try to break down what C3Ai Inc's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, C3Ai Inc will likely underperform. Even though it is essential to pay attention to
C3Ai Inc Cl existing
price patterns, it is always good to be careful when utilizing equity
price patterns. Our way of foreseeing any stock's
future performance is to check both, its past performance charts as well as the business as a whole, including all available
technical indicators. C3Ai Inc exposes twenty-seven different technical indicators, which can help you to evaluate its performance.
C3Ai Inc Cl has an expected return of -0.2%. Please be advised to confirm C3Ai Inc Cl
sortino ratio,
semi variance, and the
relationship between the
information ratio and
value at risk to decide if
C3Ai Inc Cl performance from the past will be repeated sooner or later.
Volatility is a rate at which the price of C3 Ai or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of C3 Ai may increase or decrease. In other words, similar to C3 Ai's
beta indicator, it measures the risk of C3 Ai and helps estimate the fluctuations that may happen in a short period of time. So if prices of C3 Ai fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our
technical analysis page.
How important is C3 Ai's Liquidity
C3 Ai
financial leverage refers to using borrowed capital as a funding source to finance C3 Ai Inc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. C3 Ai financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to C3 Ai's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of C3 Ai's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between C3 Ai's total debt and its cash.
C3 Ai Gross Profit
C3 Ai Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing C3 Ai previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show C3 Ai Gross Profit growth over the last 10 years. Please check C3 Ai's
gross profit and other
fundamental indicators for more details.
C3 Ai Volatility Drivers
C3 Ai unsystematic risk is unique to C3 Ai Inc and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in C3 Ai you can also buy
Model N. You can also mitigate this risk by investing in the information technology sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing C3 Ai important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in C3 Ai income statement and balance sheet. Here are more
details about C3 Ai volatility.
Click cells to compare fundamentals
Breaking down the case for C3 Ai
C3Ai Inc Cl price drop over the last few months could raise concerns from stockholders as the entity is trading at a share price of
18.55 on
4,443,272 in volume. The company executives were not very successful in positioning the entity resources to exploit
market volatility in
May. However, diversifying your holdings with C3Ai Inc or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 90 days investing horizon is currently 5.99. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the C3Ai Inc Cl partners.
Will C3Ai Inc price drop impact its balance sheet?
Current Jensen Alpha is up to 0.07. Price may drop again. C3Ai Inc Cl exhibits very low volatility with skewness of 0.63 and kurtosis of 1.86. However, we advise investors to further study C3Ai Inc Cl technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure C3Ai Inc's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact C3Ai Inc's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
C3Ai Inc Implied Volatility
C3Ai Inc's implied volatility exposes the market's sentiment of C3Ai Inc Cl stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if C3Ai Inc's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that C3Ai Inc stock will not fluctuate a lot when C3Ai Inc's options are near their expiration.
The Bottom Line
While some other entities in the information technology services industry are either recovering or due for a correction, C3Ai Inc may not be as strong as the others in terms of longer-term growth potentials. On the whole, as of the 1st of June 2022, our overall 90 days 'Buy-vs-Sell' recommendation on the company is
Hold. We believe C3Ai Inc is currently
undervalued with
very low probability of distress for the next two years.
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Raphi Shpitalnik is a Junior Member of Macroaxis Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time basis at the beginning of the pandemic and eventually acquired a real taste for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of C3 Ai Inc. Please refer to our
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