Latest news with #StefanWaldhauser
Yahoo
22-05-2025
- Business
- Yahoo
C3.ai, Inc. (AI): A Bear Case Theory
We came across a bearish thesis on Inc. (AI) on Substack by Stefan Waldhauser. In this article, we will summarize the bears' thesis on AI. Inc. (AI)'s share was trading at $24.16 as of May 16th. continues to face deep operational and financial challenges despite an improvement in revenue growth to 24% over the trailing twelve months. The company's persistent inability to generate positive cash flow and its low Rule of 40 score of 14% point to a business model that remains fundamentally inefficient. Its net loss, hovering near 80% of revenue, highlights ongoing profitability concerns. A key vulnerability is its reliance on a small number of large customers, particularly Baker Hughes, which contributes about 20% of total revenue. With the contract up for renewal and potentially expiring by June 2025, any disruption could significantly impact revenue base and stock performance. The outlook for fiscal year 2025 remains bleak, with an expected $300 million loss on less than $400 million in sales. In light of these projections, the current $2.5 billion market capitalization appears unsustainable, especially considering the stock's 30% decline year-to-date. The situation is further worsened by massive insider selling, including by CEO Tom Siebel and other executives, signaling a lack of internal confidence. Despite partnerships with Microsoft Azure and McKinsey, has failed to establish a scalable, profitable business model even after 15 years. This has not gone unnoticed by the market—short interest remains elevated, reflecting bearish sentiment and a growing consensus that the stock remains overvalued. Unless executes a significant strategic pivot or secures a game-changing contract, investors face substantial downside risk with limited near-term upside, making it a cautionary tale in the crowded AI software space. Inc. (AI) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 25 hedge fund portfolios held AI at the end of the fourth quarter which was 17 in the previous quarter. While we acknowledge the risk and potential of AI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21-05-2025
- Business
- Yahoo
SoundHound AI, Inc. (SOUN): A Bear Case Theory
We came across a bearish thesis on SoundHound AI, Inc. (SOUN) on Substack by Stefan Waldhauser. In this article, we will summarize the bears' thesis on SOUN. SoundHound AI, Inc. (SOUN)'s share was trading at $10.27 as of May 19th. SOUN's forward P/E was 147.06 according to Yahoo Finance. Zapp2Photo/ SoundHound AI, a Silicon Valley-based company founded in 2005, develops artificial intelligence technologies for speech, sound, and natural language. After going public via a SPAC merger in 2022, the company reported modest 2023 revenues of $46 million, offset by an operating loss of $64 million. In 2024, amid widespread AI market enthusiasm, SoundHound aggressively expanded by acquiring three unprofitable companies. These acquisitions fueled top-line growth, with Q1 2025 revenues reaching $29.1 million—a 151% year-over-year increase. However, this growth came at a steep cost. Losses ballooned alongside revenue, with SoundHound reporting a staggering $188 million net loss over the last four quarters, despite generating just $102 million in total revenue. Cash burn also exceeded $107 million over that period, meaning the company is spending more than it earns by a wide margin. Despite these troubling fundamentals, SoundHound trades at an astonishing valuation of over $4 billion, or approximately 25 times expected current-year sales—an extreme multiple for a company plagued by integration challenges, an unsustainable cost structure, and mounting losses. This kind of valuation suggests a complete disconnect from underlying business reality, fueled by AI hype rather than sound financial metrics. The stock is arguably worth only a small fraction of its current price, making it a prime candidate for short sellers as the AI frenzy inevitably corrects and valuations normalize in line with fundamentals. SoundHound AI, Inc. (SOUN) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held SOUN at the end of the fourth quarter which was 11 in the previous quarter. While we acknowledge the risk and potential of SOUN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SOUN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
21-04-2025
- Business
- Yahoo
Lyft, Inc. (LYFT): A Bull Case Theory
We came across a bullish thesis on Lyft, Inc. (LYFT) on Substack by Stefan Waldhauser. In this article, we will summarize the bulls' thesis on LYFT. Lyft, Inc. (LYFT)'s share was trading at $11.16 as of April 17th. LYFT's trailing and forward P/E were 186 and 10.94 respectively according to Yahoo Finance. Is Uber Technologies, Inc. (UBER) the Least Risky Internet Stock To Invest In? A close up view of a hand holding a smartphone, using a ride sharing app. Lyft's $197 million acquisition of European mobility platform Freenow marks a pivotal shift in the company's strategy, ending its North America-only focus and unlocking a broader global footprint. Freenow operates across nine European countries and more than 150 cities, with a leading position in the taxi-hailing segment. The deal, expected to close in late 2025, nearly doubles Lyft's total addressable market to over 300 billion rides per year, though it adds only ~$1 billion to gross bookings, or around 5% in inorganic growth. With Freenow estimated to generate €150–250 million in annual revenue and having just turned profitable in 2024 after years of losses, the $197 million price tag reflects roughly 1x sales—a modest valuation for an established European leader. Lyft, trading at less than 0.7x EV/sales compared to Uber's 3.5x, appears to be executing a strategic move at a compelling price. CEO David Risher has highlighted this as a transformational moment for Lyft, leveraging Freenow's deep regulatory ties, regional expertise, and dominant market share in key cities like Berlin, London, and Madrid. Freenow's heavy focus on taxi bookings (90% of gross bookings in 2024) gives Lyft access to an under-digitized market where half of bookings still occur offline—presenting a long runway for tech-enabled growth. Initially, Lyft will retain the Freenow brand and support both apps, with integration allowing cross-platform use by customers in both continents. Over time, rebranding is likely as Lyft unifies its global identity. While the short-term financial impact is minimal, the strategic value is substantial. Lyft's entry into international markets erases a key investor concern and potentially sets the stage for renewed interest in its stock, particularly as the global mobility space evolves with autonomous vehicle technology. The acquisition represents a low-risk, high-upside catalyst for a company long discounted for its domestic limitations. Lyft, Inc. (LYFT) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 55 hedge fund portfolios held LYFT at the end of the fourth quarter which was 51 in the previous quarter. While we acknowledge the risk and potential of LYFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LYFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
