BigBear.ai Faces 20% Stock Drop and Shareholder Dilution Risks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 16h ago
0mins
Source: Fool
- Stock Volatility: BigBear.ai's stock has dropped 20% over the past three months, currently priced at $6.20 with a market cap of $2.7 billion, indicating market concerns about its future prospects.
- Financial Struggles: Despite attempts to reverse its fortunes through acquisitions, BigBear.ai's trailing twelve-month revenue has declined by 10.3%, with net losses ballooning from $69 million at the start of 2024 to $396.1 million today, reflecting ongoing profitability issues.
- Shareholder Dilution: The company plans to double its authorized common stock from 500 million to 1 billion shares, posing potential dilution risks for shareholders, who have already seen their equity value shrink by 64% over the past two years.
- Acquisition Strategy Risks: BigBear.ai's growth strategy through acquisitions in a competitive AI sector carries the risk of being outbid by stronger rivals, and the integration of newly acquired technologies with existing products remains uncertain, potentially further impacting its market position.
Analyst Views on BBAI
Wall Street analysts forecast BBAI stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BBAI is 6.50 USD with a low forecast of 5.00 USD and a high forecast of 8.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
2 Analyst Rating
1 Buy
1 Hold
0 Sell
Moderate Buy
Current: 6.170
Low
5.00
Averages
6.50
High
8.00
Current: 6.170
Low
5.00
Averages
6.50
High
8.00
About BBAI
BigBear.ai Holdings, Inc. is a provider of artificial intelligence (AI)-powered decision intelligence solutions for national security, supply chain management and digital identity. The Company is a technology-led solutions organization, providing both software and services to its customers. It combines subject-matter expertise with technology to connect the enterprise, provide insights on process performance and recommendations for managing risk. It offers computer vision, anomaly/event detection, and descriptive and predictive analytics to support operations and break down silos between vendors and systems. The Company’s customers span the public and private sector, including the United States defense and intelligence agencies, border protection, transportation security, manufacturing, distribution and logistics, as well as travel, entertainment and tourism. It also offers software assets that are tailored for digital identity and biometrics, leveraging advanced vision AI technology.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
