Why BigBear.ai Stock Is Dropping After Earnings

BigBear.ai, Inc. BBAI shares are dropping Friday after the company posted worse-than-expected fourth-quarter financial results Thursday after the bell.

The Details:

BigBear.ai reported quarterly losses of 14 cents per share, which missed the consensus estimate of losses of 5 cents per share.

Quarterly sales came in at $40.563 million, missing the analyst consensus estimate of $42.755 million and representing a 0.51% increase year-over-year.

"As we close out FY 2023, I am proud of the work that we have done as a company to solidify BigBear.ai's (foundation). We entered the year in a different position than many other companies that are playing a role in the transformative potential of artificial intelligence," said BigBear.ai CEO Mandy Long.

The company also announced its acquisition of Pangiam Intermediate Holdings was finalized on Feb. 29.

BigBear.ai shares had gained more than 80% following Nvidia's blockbuster earnings report, and the stock remains up nearly 50% over the past month even with Friday's losses. 

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BBAI Stock Forecast 2030:

Predicting the future in stock prices over long periods of time is challenging. Wall Street analysts use complex models that take into account interest rates, economic growth, competitive advantages, management teams and historical profitability, among a host of other factors.

If, as an investor, you want to assume most of the major factors remain stable, you can use trend analysis as a helpful tool. Using a longer term trend line or historical performance of the stock, you can aim to forecast a stock's annual rate of return.

For BigBear.ai Hldgs, over the past 5 years, it's annualized stock performance is -17.49%, and if you assume that trend continues for another 5 years, you can expect a stock to trade at $0.99.

Using a trend line (see how to perform this function here), If you choose to use a trend line, connect your two points and look into the future to the point in time in which you're curious. Once you've identified that stock price, you may want to consider what type of conditions would need to exist for the stock to justify the share price – be it an outside influence or managerial decision making.

BBAI Price Action: According to Benzinga Pro, BigBear.ai shares are down 31.7% at $2.56 at the time of publication.

Image: Brian Penny from Pixabay