Cerebras Systems (NASDAQ:CBRS) Shares Climb 11.2% on Earnings Beat

Key Points

• Cerebras shares jumped 11.2% after the company reported quarterly EPS of $0.13, beating the consensus estimate of a $0.13 loss, on revenue of $230.87 million. Trading volume was more than four times its average.
• The company raised its revenue outlook, forecasting fourth-quarter revenue of $310 million–$330 million and full-year revenue of $940 million–$960 million. Cloud revenue grew 272% year over year, and Cerebras cited Microsoft and other hyperscalers as new customers.
• Execution risks remain: reports of delays in delivering AI capacity for OpenAI and an investor-claims investigation could weigh on confidence.

Cerebras Systems Inc. (NASDAQ:CBRS - Get Free Report) rose 11.2% during mid-day trading on Friday following a stronger than expected earnings report. The stock traded as high as $120.44 and last traded at $108.72. 36,225,161 shares were traded during mid-day trading, an increase of 338% from the average session volume of 8,262,584 shares. The stock had previously closed at $97.75.

The company reported $0.13 earnings per share (EPS) for the quarter, beating the consensus estimate of ($0.13) by $0.26. The firm had revenue of $230.87 million for the quarter.

Latest Cerebras Systems News

Here's some of the latest news about CBRS:

• Positive Sentiment: Q3 results and guidance beat expectations. Cerebras reported record core revenue of $230.9 million and EPS of $0.13, above the cited consensus loss estimate. It forecast Q4 revenue of $310 million–$330 million and raised its full-year revenue outlook to $940 million–$960 million, above analyst estimates. Reuters report on results and outlook
• Positive Sentiment: Cloud growth and major customer wins support the growth case. Core cloud revenue rose 272% year over year, and the company announced Microsoft as a new customer alongside two new hyperscaler wins. Cerebras said 700 megawatts of data-center capacity is under contract. Cerebras earnings release
• Negative Sentiment: Capacity execution and legal headlines are risks. A report said Cerebras delayed delivery of AI capacity for OpenAI because of data-center buildout delays. Separately, a law firm announced an investor-claims investigation. These headlines could add uncertainty around execution and investor confidence. Report on OpenAI capacity delay

Analyst Ratings Changes

Several equities research analysts recently issued reports on the company. Freedom Capital raised Cerebras Systems from a "hold" rating to a "strong-buy" rating in a research report on Friday, October 2nd. Weiss Ratings cut Cerebras Systems from a "sell (d)" rating to a "sell (d-)" rating in a research note on Wednesday, November 4th. Jefferies Financial Group raised shares of Cerebras Systems to an "outperform" rating in a report on Monday, October 5th. UBS Group lowered their target price on shares of Cerebras Systems from $250.00 to $155.00 and set a "buy" rating for the company in a research note on Friday. Finally, Mizuho lowered their target price on shares of Cerebras Systems from $300.00 to $240.00 and set an "outperform" rating for the company in a research note on Friday. Two research analysts have rated the stock with a Strong Buy rating, ten have assigned a Buy rating, one has given a Hold rating and one has assigned a Sell rating to the company's stock. According to MarketBeat, the company has a consensus rating of "Moderate Buy" and a consensus price target of $237.80.

Insider Transactions at Cerebras Systems

In other Cerebras Systems news, Director Steven Vassallo sold 50,000 shares of Cerebras Systems stock in a transaction that occurred on Friday, September 4th. The stock was sold at an average price of $210.30, for a total value of $10,515,000.00. Following the completion of the transaction, the director directly owned 171,977 shares in the company, valued at $36,166,763.10. The trade was a 22.52% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, Director Eric Vishria sold 68,268 shares of Cerebras Systems stock in a transaction that occurred on Monday, August 17th. The shares were sold at an average price of $229.77, for a total value of $15,685,938.36. Following the completion of the transaction, the director owned 31,383 shares of the company's stock, valued at approximately $7,210,871.91. The trade was a 68.51% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 1,874,452 shares of company stock valued at $383,719,154 over the last ninety days.

Institutional Inflows and Outflows

A number of institutional investors have recently added to or reduced their stakes in CBRS. Value Aligned Research Advisors LLC bought a new stake in Cerebras Systems in the second quarter valued at $241,934,000. Washington University boosted its holdings in shares of Cerebras Systems by 175.3% during the third quarter. Washington University now owns 1,517,400 shares of the company's stock valued at $269,566,000 after acquiring an additional 966,314 shares during the period. Wellington Management Group LLP bought a new position in shares of Cerebras Systems during the second quarter worth about $194,853,000. Lunate Capital Ltd bought a new position in shares of Cerebras Systems during the third quarter worth about $115,351,000. Finally, State Street Corp bought a new position in shares of Cerebras Systems during the second quarter worth about $105,343,000.

Cerebras Systems Stock Performance

The company has a current ratio of 5.82, a quick ratio of 5.80 and a debt-to-equity ratio of 0.02. The firm has a fifty day moving average price of $152.65. The stock has a market capitalization of $25.83 billion and a price-to-earnings ratio of -1,359.00.

Cerebras Systems Company Profile

Cerebras Systems develops computing systems and software designed for artificial intelligence and other compute-intensive workloads. Its products are built around the Wafer-Scale Engine, a large processor designed to support AI model training and inference, and include the CS-3 system and related software. The company also offers cloud-based access to its AI computing infrastructure, giving customers a way to run AI workloads without deploying its systems on site. Its offerings are aimed at organizations developing and operating large AI models, including businesses, research institutions and public-sector customers.

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