BigBear.ai Holdings (BBAI) stock has declined 24% over the past month amid persistent concerns about the elevated valuations of artificial intelligence (AI) stocks. On Thursday, the AI-powered intelligence solutions provider signed a memorandum of understanding (MOU) with Easy Lease and Vigilix to accelerate the integration of advanced technologies throughout the Pahang Aerospace City, Southeast Asia’s first AI-driven aerospace hub. However, BBAI stock declined despite the announcement, as investors remain wary of its valuation amid declining revenue and margin woes. Currently, Wall Street is cautiously optimistic about BigBear.ai stock’s prospects.
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BBAI’s Recent Performance
BigBear.ai reported a 20% year-over-year decline in its Q3 revenue to $33.1 million, citing lower volume on certain Army programs. It reported a loss per share of $0.03. However, both metrics were better than the Street’s expectations. The company ended the quarter with a backlog of $376 million.
The AI company also announced the $250 million acquisition of Ask Sage, a generative AI platform for the secure distribution of AI models and agentic AI capabilities, specifically suited for defense and national security agencies and other highly regulated sectors.
Wall Street’s Take on BigBear.ai Stock
Following the Q3 print, analysts at Cantor Fitzgerald reiterated a Buy rating on BBAI stock and increased the price target to $7 from $6, citing long-term secular growth drivers and growing AI spending. They noted the company’s market-beating performance and added that the revenue decline was primarily due to federal program disruptions, with lower volumes on certain Army contracts, and the U.S. government shutdown.
Meanwhile, H.C. Wainwright analyst Scott Buck reiterated a Buy rating on BigBear.ai stock with a price target of $8. The analyst expects the Ask Sage acquisition to be margin accretive to the company, given “SaaS-like margins at Ask Sage.” Buck expects BigBear.ai to accelerate its growth by pursuing additional acquisitions, given that it has $715 million in cash and investments following an intensive capital-raising effort.
Meanwhile, Buck believes that BBAI is well positioned to benefit from the Trump administration’s priorities, which involve significantly higher investments in areas aligned with the company’s “core competencies.”
Unlike analysts at Cantor and H.C. Wainwright, Northland Securities analyst Michael Latimore maintained a Hold rating on BBAI stock but raised the price target to $5 from $3.50.
Is BBAI Stock a Good Buy?
Currently, Wall Street has a Moderate Buy consensus rating on BigBear.ai Holdings stock, with the average stock price target of $6.50 indicating 20.2% upside potential from current levels. Despite the recent selloff, BBAI stock is up more than 21% year-to-date.
