Cantor Fitzgerald cuts BigBear.ai stock target to $5, keeps overweight

Published 02/05/2025, 12:26
Cantor Fitzgerald cuts BigBear.ai stock target to $5, keeps overweight

On Friday, Cantor Fitzgerald’s analysts adjusted their financial outlook for BigBear.ai Holdings (NYSE:BBAI), reducing the 12-month price target from $6.00 to $5.00, yet maintaining an Overweight rating on the company’s stock. Currently trading at $3.34, with a market capitalization of $965 million, BBAI shows significant price volatility with a beta of 3.08. This revision reflects concerns over the broader macroeconomic environment.

BigBear.ai reported its first-quarter earnings for 2025, posting a revenue increase of 4.9% to $34.8 million, continuing its modest growth trajectory with trailing twelve-month revenue growth at 1.98%. Despite this growth, the company did not meet the revenue expectations set by FactSet consensus estimates. The firm’s backlog by the end of the quarter stood at $385 million, marking a substantial year-over-year increase of 30.1%. According to InvestingPro, the company’s overall Financial Health Score remains WEAK at 1.65.

The analysts noted that BigBear.ai’s first-quarter performance showcased noteworthy advancements in key areas such as core product development and the strengthening of the company’s balance sheet, though InvestingPro data shows a current ratio of 0.46, indicating potential liquidity challenges. These developments are seen as positive steps in the company’s strategy. InvestingPro subscribers have access to 7 additional key ProTips and comprehensive financial analysis for BBAI.

Moreover, BigBear.ai has confirmed its financial guidance for the year 2025, predicting a revenue growth range between 1.1% and 13.7%. This reiteration of the forecast suggests a steady outlook for the company’s topline growth in the face of current economic uncertainties.

Investors are watching BigBear.ai’s progress closely, as the company continues to navigate the challenging macroeconomic landscape while pursuing its strategic initiatives and growth targets.

In other recent news, BigBear AI Holdings Inc. reported its first-quarter 2025 earnings, revealing a larger-than-expected loss and revenue shortfall. The company posted an earnings per share (EPS) of -$0.25, missing the forecasted EPS of -$0.05, and revenue came in at $34.8 million, below the expected $40.24 million. Despite these misses, revenue increased by 5% year-over-year, and gross profit rose by 6%. BigBear AI’s net loss improved to $62 million from $127.8 million in Q1 2024, and the company managed to reduce its convertible notes principal significantly. Analysts noted the company’s strategic focus on AI solutions and international expansion, which may influence future performance. The company reaffirmed its full-year 2025 guidance, emphasizing a strategic expansion into international markets and critical sectors like shipbuilding. While the company faces challenges in meeting revenue forecasts, its backlog increased by 30% year-over-year, signaling continued customer confidence. BigBear AI ended the quarter with $108 million in cash and cash equivalents, up from $81 million in Q1 2024, providing increased financial flexibility.

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