24% reduction, Should I buy dip at bigbear.ai?
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The company’s stock price is falling as it struggles to bring about revenue growth.
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Despite the best efforts of multiple CEOs, the company is not making any profit.
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The artificial intelligence analysis market is still promising.
Many companies selling artificial intelligence (AI) services have seen stock prices skyrockets over the past few years. AI Data Analysis Company bigbear.ai (NYSE: BBAI) We have seen considerable volatility, but we also benefit from bull market sentiment.
The company’s stock price has skyrocketed 142% over the past 12 months. S&P 500. That said, we have lost a lot of ground recently, with a 24% decline in the last three months.
I’m definitely wondering if this is the best time to buy with some investors at a recent dip bigbear.ai stock Or a warning sign to leave. There is still a lot to prove at the company. There are three reasons why investors should leave this AI stock at this time.
SMEs, like AI, are exploiting such a rapid, high-demand market, should experience rapid sales growth. Still, Bigbear has increased its revenue by just 5% year-on-year to $34.8 million in the most recent quarter.
Unfortunately, this seems to be a company pattern. Revenue increased by just 2% in 2023 in 2024. This year, management could see sales increase by 7% (midpoint of guidance).
This is an impressive growth for such a young AI company. For comparison, fellow AI data analytics companies Palantir Technologies Last year’s sales increased to 29% to $2.9 billion.
Typically, high-growth companies experience many top-line expansions early on, and investors hope that their momentum will ultimately lead to profits. However, Bigbear.ai has been missing sales for years.
Bigbear.ai reported adjustments ebitda The loss of $7.0 million in the first quarter was worse than the loss of $1.6 million in the same period last year.
Management said costs are driven primarily by increased research and development costs and repeated sales, general and management (SG&A) costs. In either case, the company cannot afford to continue to outperform these costs than its sales.
For investors who want their profits to follow the same pattern as astronomical price-earnings over the past few years, it is likely to be a very long wait.
This may not be a typical reason investors should avoid businesses, but it certainly raises some red flags. Leadership is crucial to the success of a company, so it’s a concern to see bigbear.ai under the third CEO since it was released in 2021.