BigBear.ai (BBAI) was downgraded to Neutral from Overweight by Cantor following a 20% year-over-year revenue decline in the artificial intelligence and analytics company’s most recent quarterly earnings results.
Cantor also reduced its price target on the stock to $6 from $7.
BigBear shares were down 4% during early Wednesday trading.
“Execution risk remains elevated given reliance on lumpy government contracts, contributing to continued operating losses and margin pressure, with adjusted EBITDA of ($9.4M) in 3Q25 and an operating margin of (66.0%),” said Cantor analysts Jonathan Ruykhaver and Ben Mitchell in a Wednesday investor note.
BigBear draws about one-third of its revenue from government contracts with agencies such as the U.S. Department of Defense and the Department of Homeland Security. Its third-quarter revenue was affected by the prolonged government shutdown.
The company recently acquired Ask Sage, a generative artificial intelligence platform for secure distribution of artificial intelligence models and agentic AI capabilities, built specifically for defense and national security agencies and other regulated sectors.
“While the Ask Sage acquisition strengthens AI positioning in highly regulated environments, the $250M deal at ~10x FY25 ARR introduces integration risk and extends the timeline to meaningful margin expansion,” Ruykhaver noted.