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

Cerebras Systems Inc. (NASDAQ:CBRS) shares were up 11.2% on Friday after the company announced better than expected quarterly earnings. The company traded as high as $120.44 and last traded at $108.72. 36,225,161 shares traded hands 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 analysts’ consensus estimates of ($0.13) by $0.26. The company had revenue of $230.87 million during the quarter.

Key Cerebras Systems News

These are some of the CBRS news items that stood out recently:

• 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
• Neutral Sentiment: Analysts remain positive but have lowered targets. UBS cut its price target from $250 to $155 and Needham reduced its target from $300 to $200; both retained Buy ratings. The cuts temper expectations, though the firms still see potential upside. UBS rating information
• 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

A number of equities research analysts have recently commented on CBRS shares. Weiss Ratings downgraded Cerebras Systems from a “sell (d)” rating to a “sell (d-)” rating in a research report on Wednesday, November 4th. Needham & Company LLC decreased their target price on Cerebras Systems from $300.00 to $200.00 and set a “buy” rating on the stock in a report on Friday. Wall Street Zen raised Cerebras Systems from a “sell” rating to a “hold” rating in a research report on Saturday, August 15th. Rosenblatt Securities reaffirmed a “buy” rating and set a $300.00 target price on shares of Cerebras Systems in a report on Wednesday, August 19th. Finally, Wedbush set a $205.00 price target on Cerebras Systems in a research report on Friday. Two research analysts have rated the stock with a Strong Buy rating, ten have given a Buy rating, one has given a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat, Cerebras Systems currently has an average rating of “Moderate Buy” and an average price target of $237.80.

Insiders Place Their Bets

In other news, Director Eric Vishria sold 68,268 shares of the stock in a transaction on Monday, August 17th. The stock was sold at an average price of $229.77, for a total value of $15,685,938.36. Following the completion of the sale, the director owned 31,383 shares in the company, valued at $7,210,871.91. This represents a 68.51% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Andrew D. Feldman sold 237,559 shares of the firm’s stock in a transaction on Friday, August 21st. The stock was sold at an average price of $199.27, for a total value of $47,338,381.93. Following the completion of the sale, the chief executive officer directly owned 16,853 shares of the company’s stock, valued at approximately $3,358,297.31. This trade represents a 93.38% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 1,874,452 shares of company stock valued at $383,719,154 over the last 90 days.

Institutional Investors Weigh In On Cerebras Systems

Hedge funds have recently bought and sold shares of the business. Value Aligned Research Advisors LLC acquired a new stake in Cerebras Systems during the 2nd quarter worth about $241,934,000. Washington University grew its stake in Cerebras Systems by 175.3% during the 3rd 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 in the last quarter. Wellington Management Group LLP purchased a new position in Cerebras Systems during the 2nd quarter valued at about $194,853,000. Lunate Capital Ltd acquired a new position in shares of Cerebras Systems in the 3rd quarter valued at about $115,351,000. Finally, State Street Corp acquired a new position in shares of Cerebras Systems in the 2nd quarter valued at about $105,343,000.

Cerebras Systems Trading Up 11.2%

The company’s fifty day moving average price is $152.65. The company has a debt-to-equity ratio of 0.02, a quick ratio of 5.80 and a current ratio of 5.82. The firm has a market cap of $25.83 billion and a P/E 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.