BigBear.ai (NYSE:BBAI) stock took a 16% pounding since Tuesday’s session after its Q2 results failed to please investors. That setback halted what had been a spectacular run, with the defense-oriented software and services provider still boasting 12-month gains of 354% on the back of the AI boom.
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Those gains, however, offered little cushion against the disappointment that followed. The company missed on both revenue and earnings, reporting $32.5 million in sales – down 18.3% year-over-year and $8.08 million short of Street forecasts – while posting a $0.71 per-share loss, missing estimates by $0.65.
The bad news didn’t stop there. Management compounded the blow with a sharp cut to its full-year revenue outlook, citing weaker Q2 performance and federal contract disruptions, particularly in programs tied to the U.S. Army. The new forecast of $125 million to $140 million is well below the prior $160 million to $180 million range and falls short of the $167.74 million consensus.
While the market punished the stock for these setbacks, H.C. Wainwright analyst Scott Buck sees the results in a broader context.
“While disappointing, these results should not come as a surprise given what we have heard from other reporting peers in the defense space, which have also experienced program delays,” Buck explained. “We believe revenue visibility could begin to improve as the business moves towards 2026.”
That longer-term view is buoyed by policy and financial tailwinds. Buck points to the “One Big Beautiful Bill,” which channels $170 billion in additional funding to the Department of Homeland Security – directly aligned with BigBear.ai’s strengths. The company also bolstered its balance sheet during the quarter, closing with over $390 million in cash, capital that Buck expects will be deployed for reinvestment and acquisitions.
In his view, these factors outweigh the near-term pain, giving investors a reason to stay optimistic. That’s why Buck recommends using the current weakness as a buying opportunity, maintaining a Buy rating on BBAI but trimming his price target from $9 to $8, which still leaves room for a potential 38% gain. (To watch Buck’s track record, click here)
Overall, this small-cap firm has largely flown under the radar, with only 3 recent analyst reviews – 2 Buys and 1 Hold – for a Moderate Buy consensus rating. At $5.81, the shares trade below the $6.67 average price target, suggesting ~15% potential upside over the next 12 months. (See BBAI stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.