AI Analyst Issues Caution as BigBear.ai Holdings (BBAI) Stock Faces Q3 Earnings Forecast

Basio badr

ago 8 hours

AI Analyst Issues Caution as BigBear.ai Holdings (BBAI) Stock Faces Q3 Earnings Forecast

BigBear.ai Holdings (BBAI) is set to release its third-quarter earnings on November 10. Analysts anticipate a loss per share of $0.07, with projected revenue of $31.81 million. Despite significant gains in its stock price, recent assessments raise caution among investors.

Stock Performance and A.I. Analysis

Over the past year, BBAI stock has surged nearly 324%. In 2025 alone, it has increased by approximately 66.7%. This rise is largely attributed to optimism surrounding the company’s involvement in artificial intelligence and government analytics.

However, an analysis from TipRanks suggests a more cautious outlook. The AI rating assigned to BBAI stands at Neutral, with a price target of $5.50, indicating a potential decline of almost 25.88% from current levels. The AI score of 43 out of 100 highlights ongoing financial difficulties.

Positive Aspects of BBAI’s Outlook

Despite the challenges, there are several encouraging factors regarding BigBear.ai’s future. The company reported a strong cash position of $390.8 million at the conclusion of Q2. This financial strength allows it to pursue growth initiatives and manage debt effectively.

Global Partnerships: BigBear.ai’s expanding partnerships are generating revenue from new markets.
Increased Demand for AI: The growing need for AI solutions in defense and logistics presents opportunities for BBAI.

Recently, BigBear.ai entered into collaborations with Tsecond Inc. to provide AI systems for national security and defense. Additionally, a partnership with SMX aims to enhance AI capabilities for UNITAS 2025, a prominent naval exercise led by the U.S. Navy.

Risks and Challenges for BBAI

Nevertheless, BBAI faces significant risks. Revenue has seen a downturn as a result of contract issues, raising concerns about income consistency and future profitability. The company also reported a negative adjusted EBITDA, indicating persistent cost issues and slow progress towards financial stability.

In Q2, BBAI’s revenue was $32.5 million, falling short of expectations by missing the estimate of $40.59 million due to reduced activity on specific U.S. Army programs. An adjusted loss of $0.71 per share also represented a substantial deviation from the expected loss of $0.06. Furthermore, with adjusted EBITDA at negative $8.5 million, the company is dealing with declining margins and increasing research and development expenditures.

Investment Considerations

As it stands, Wall Street’s consensus rate for BigBear.ai Holdings is Moderate Buy, underpinned by two Buy ratings and two Holds. The average price target for BBAI stock is $5.75, suggesting a potential downside risk of approximately 22.51% from current levels.