BigBear.ai Holdings (NYSE: BBAI) came under renewed selling pressure on Tuesday after two Wall Street firms cut their price targets in response to the company’s fourth-quarter results.
Specifically, shares fell about 8% to $3.78 in regular trading as investors digested weaker-than-expected revenue and a softer forward outlook. Meanwhile, trading remained active, though slightly below typical levels, with 51.67 million shares exchanged compared with the 78.21 million daily average.
Overall, the latest decline deepens what has already been a difficult stretch for the stock. Shares are down 59.23% from their 52-week high of $9.39 and have fallen 29.11% since the start of the year. Consequently, the company’s market capitalization now stands at $1.69 billion.
Key Points
- H.C. Wainwright lowered its price target to $6 from $8; Cantor Fitzgerald cut its target to $5 from $6.
- Analysts cited disappointing Q4 revenue of $27.3 million, which missed estimates and declined because of disruptions in federal programs and lower U.S. Army contract volumes.
- Shares slid about 8% to $3.78 amid the sell-off, continuing the stock’s broader downward trend.
- Gross margins contracted sharply to 20.3%, and adjusted EBITDA swung to a $10.3 million loss, highlighting profitability pressures.
- The 2026 outlook reflects moderate growth from recent acquisitions, Ask Sage and CargoSeer. However, analysts warned of ongoing sector uncertainties.
Analysts Cut Targets After Revenue Miss
Following the earnings release, analysts recalibrated their expectations.
For instance, H.C. Wainwright lowered its price target to $6 from $8 while maintaining a “Buy” rating. Similarly, Cantor Fitzgerald reduced its target to $5 from $6 and reiterated a “Neutral” rating. Both firms cited softer quarterly performance in their updates.
BigBear.ai Holdings (NYSE: BBAI) reported fiscal fourth-quarter 2025 revenue of $27.3 million. H.C. Wainwright said the result missed its $30.7 million estimate and fell short of the broader analyst consensus of $33.3 million.
Cantor Fitzgerald highlighted a 37.7% year-over-year revenue decline, attributing the drop primarily to disruptions in federal programs and lower volumes on certain U.S. Army contracts. Additionally, H.C. Wainwright pointed to government shutdown-related headwinds that weighed on demand during the quarter.
Despite the revenue shortfall, earnings came in ahead of expectations. The company posted a loss of $0.01 per share, narrower than the projected $0.07 per-share loss.
Margin Pressure Weighs on Profitability
Top-line weakness was compounded by significant margin contraction. Gross margin fell to 20.3% from 37.4% in the prior-year quarter. Management explained that the fourth quarter of 2024 benefited from high-margin contracts that did not recur this year.
Consequently, operating performance deteriorated. Adjusted EBITDA swung to a loss of $10.3 million from a gain of $2.0 million a year earlier, reflecting both lower gross profit and increased spending on research and development as well as administrative costs.
Even so, Cantor Fitzgerald characterized the quarter as solid overall, given the challenging environment.
2026 Outlook Reflects Acquisitions, Moderate Growth
Looking ahead, management guided for fiscal 2026 revenue between $135 million and $165 million. H.C. Wainwright noted that the range sits below its prior $200 million estimate. By contrast, Cantor Fitzgerald said the midpoint implies approximately 17% growth.
Importantly, the outlook incorporates contributions from recent acquisitions. The company acquired Ask Sage in December 2025 and completed its purchase of CargoSeer in January 2026.
In fact, Cantor Fitzgerald estimates Ask Sage could generate roughly $25 million in fiscal 2026 revenue. Furthermore, H.C. Wainwright added that the deal may support higher gross margins and improved operating leverage over time.
Beyond growth initiatives, BigBear.ai Holdings (NYSE: BBAI) strengthened its balance sheet by settling its remaining 2029 convertible notes in January 2026, a move expected to reduce annual interest expense by about $9 million. The company now holds approximately $462 million in cash and investments.
Taken together, analysts see a mix of risk and opportunity ahead. H.C. Wainwright said the company remains positioned to benefit from national security investment priorities under the current U.S. administration. However, the analysts cautioned that broader uncertainty in the software and AI sectors could continue to pressure valuations in the near term.
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