Analysts Just Slashed Their BigBear.ai Holdings, Inc. (NYSE:BBAI) EPS Numbers

The latest analyst coverage could presage a bad day for BigBear.ai Holdings, Inc. (NYSE:BBAI), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

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After the downgrade, the consensus from BigBear.ai Holdings' three analysts is for revenues of US$134m in 2025, which would reflect a not inconsiderable 12% decline in sales compared to the last year of performance. The loss per share is expected to ameliorate slightly, reducing to US$1.10. However, before this estimates update, the consensus had been expecting revenues of US$168m and US$0.41 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

View our latest analysis for BigBear.ai Holdings

The consensus price target was broadly unchanged at US$5.83, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 23% by the end of 2025. This indicates a significant reduction from annual growth of 0.7% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 13% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - BigBear.ai Holdings is expected to lag the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at BigBear.ai Holdings. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that BigBear.ai Holdings' revenues are expected to grow slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on BigBear.ai Holdings after the downgrade.

That said, the analysts might have good reason to be negative on BigBear.ai Holdings, given major dilution from new stock issuance in the past year. Learn more, and discover the 2 other warning signs we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.