Daily Scoop🍨: Big Bear AI (BBAI) $6-7 Prediction Throughout 2025
BigBear.ai's (BBAI 7.95%) stock price has rallied about 120% over the past 12 months, but it's still trading nearly 70% below its all-time high from April 2022. The AI software developer bounced back as its revenue growth stabilized and its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improved.
Many of its investors initially fled when its revenue growth flatlined in 2023 as it struggled with macroeconomic headwinds, tough competition, and the bankruptcy of its major customer Virgin Orbit. But under Mandy Long, a former IBM executive who took over as its CEO in late 2022, it stabilized its business by acquiring the AI vision firm Pangiam in an all-stock takeover, securing new government contracts, and trimming its workforce. It also secured more data-sharing deals for its AI analytics modules, which can be directly plugged into an organization's existing software and edge networks.
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Shares of BigBear.ai Holdings (BBAI) plummeted 15.76% in Tuesday's trading session following the artificial intelligence software provider's announcement of significant accounting issues. The company revealed it would need to restate several years of financial statements and delay filing its annual report for 2024, raising concerns among investors about its financial reporting and accountability.
BigBear.ai disclosed that it will restate its audited consolidated financial statements for the fiscal years ended December 31, 2022, and 2023, as well as interim financial statements for each quarterly period in 2023 and 2024. The restatement is attributed to a change in the interpretation and application of accounting guidance, particularly related to the accounting presentation of convertible debt due in 2026. Despite assurances that these changes are not expected to impact revenues, gross margin, adjusted EBITDA, or operating cash flows in any prior period, investors reacted negatively to the news.
Adding to the company's woes, BigBear.ai expects to report a significant increase in its pre-tax loss, projecting $296.1 million for 2024 compared to $71.3 million in 2023. This substantial widening of losses, combined with the need for financial restatements, has likely contributed to the sharp decline in stock price. The plunge comes on top of an already challenging period for BigBear.ai, whose stock has dropped 59% in the past month amid a broader selloff in highly valued AI stocks. As the company works to address these accounting issues and file its delayed annual report, investors will be closely monitoring the situation for any further developments that could impact BigBear.ai's financial standing and market position.