BigBear.ai stock remains a divisive investment choice

BigBear.ai's stock has had a tough time since it went public in December 2021. Initially priced at $9.84, it has dropped to around $3.50. The company, which develops artificial intelligence software, has disappointed investors as it struggled to meet its revenue forecasts. Rising interest rates also hurt its market value, adding to its challenges. The company focuses on AI modules that help organizations analyze data faster. BigBear.ai's products are integrated with various analytics firms, like Palantir Technologies. Last year, the company acquired Pangiam, an AI vision tech firm, and appointed its co-founder, Kevin McAleenan, as the new CEO. Some believe McAleenan's government experience may help secure more contracts. BigBear.ai's revenue has consistently fallen short of projections. While management attributed this to economic factors and tough competition, peers like Palantir have shown stronger growth. In 2024, the company’s revenue mostly came from the Pangiam acquisition, and without it, revenue could decline further. Looking ahead, BigBear.ai has won several government contracts since McAleenan took over. They project revenue growth of 1% to 14% in 2025. Analysts estimate a 7% rise to about $170 million. However, the company expects to continue operating at a loss. BigBear.ai has increased its shares by 86% since going public, which could further dilute shareholder value. Insiders have sold more shares than they bought in the past year, raising concerns. The stock previously spiked after Donald Trump's election, as many hoped for increased government spending on AI. However, Trump's budget cuts led to a significant drop in the stock price. The company warned that any government shutdown could lead to changes in its financial guidance. In summary, BigBear.ai's stock remains controversial in the market. Its recent decline might make it attractive, but it still does not appear undervalued. Investors may want to be cautious unless the company can show it can grow without relying on risky acquisitions.