Analysts Are Slashing Their Price Targets on This Little-Known AI Stock. What’s Causing the Bloodshed?

Wall Street seems to be turning a bit more cautious on BigBear.ai (BBAI) after the provider of AI-enabled decision intelligence solutions reported a wider-than-expected loss for its Q4. 

Cantor Fitzgerald analyst Yi Fu trimmed his price target on BigBear.ai this morning to $6, citing “underwhelming” top-line growth in the fourth quarter. 

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BigBear.ai stock is down about 20.5% following its earnings release on Friday, March 7. 

Why Did BigBear.ai Stock Crash on Friday?

BigBear.ai saw its revenue climb 8% on a year-over-year basis to $43.8 million in the fourth quarter. However, analysts had called for a much higher $53.84 million. 

In terms of the bottom line, the company lost $108 million in the fourth quarter – over five times more than its loss in the same quarter last year. 

More importantly, the New York-listed firm expects continued weakness ahead, given its full-year guidance for a 7.5% increase in revenue at the mid-point of its range fell short of consensus estimates. 

Still, Kevin McAleenan, the chief executive of BBAI, touted contract wins, a strong backlog, tech advancements and debt restructuring as he dubbed 2024 a “pivotal year for the business” in the earnings release on Friday.  

Nonetheless, BigBear.ai stock is now down more than 65% versus its high in mid-February. 

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Cantor Fitzgerald Sees 80% Upside in BBAI Shares

Investors should note that the Cantor Fitzgerald analyst lowered his price target on BigBear.ai stock today, but continues to rate the artificial intelligence company at “Overweight.” 

In fact, his downwardly revised price target still signals massive upside of about 80% from current levels. 

Fu expects the company’s Pangiam acquisition to serve as a long-term catalyst. Focus on higher-margin commercial customers, he’s convinced, will establish BigBear.ai as a leading AI name in the intelligence space. 

How Other Analysts View BigBear.ai Stock

Other analysts seem to agree that the post-earnings decline in BigBear.ai may have gone a bit too far considering the consensus rating on the stock currently sits at “Strong Buy.” 

Wall Street sees upside in BBAI shares to $5.83 on average that translates to potential upside of about 75% from current levels. 

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