BigBear.ai (NYSE:BBAI) has nosedived another 23% today on top of significant losses since the second half of February. This has erased all its gains in the past year and then some. The stock is now down over 21%.
BigBear.ai is down due to its disappointing Q4 2024 earnings report. It announced its Q4 2024 and full-year results yesterday. Revenue came in at $43.8 million, up 8% year-over-year. This missed estimates by $10.82 million. GAAP EPS of -$0.43 missed estimates by $0.38.
The company’s net loss expanded to $108 million from $21.3 million in 2023.
The guidance wasn’t rosy either. It guided for FY2025 revenue between $160 million and $180 million. Analysts expected $193.9 million. The guidance also implies just 7.4% growth at the midpoint.
It also forecasts negative single-digit millions in adjusted EBITDA for 2025.
The stock tumbled, and the decline accelerated as Cantor Fitzgerald lowered its price target. It kept its Overweight rating but lowered its price target by $2 due to the underwhelming figures. HC Wainwright has also cut its price target from $7 to $6.
The market was already quite nervous about AI stocks before the earnings report. AI-related stocks lost ground recently after chipmaker Marvell Technology (NASDAQ:MRVL) provided an underwhelming forecast.
Wall Street is worried about the potential profitability of AI and slowing growth, and BigBear.ai’s earnings reinforced these concerns.
The timing couldn’t be worse. The recent jobs report miss has sent the broader market tumbling again, and any bad news is going to weigh in disproportionately on BBAI stock.
It wouldn’t be a smart idea to buy BBAI stock with the Q4 report. The fundamentals no longer add up, and even if the broader market turned bullish again, a meaningful recovery from here would be surprising. I’d sell.
