BBAI Stock Analysis #shorts

Bullish Studio

Bigbear.ai rose 260% last Thursday in one of the biggest moves of the week.   But the story isn’t quite what it seems.   The main catalyst for the move is an apparent contract win with the U.S. Air Force worth $900 million dollars.   There was also some chatter online about the stock being a potential short squeeze given that 13% of the float was sold short ahead of the announcement.   But, the 900 million dollar award does not mean $900M in revenue is coming in.   It's what’s called an IDIQ contract which means indefinite delivery / indefinite quantity.  As Bigbear itself said, the company has simply been selected *to compete* for orders.  Some analysts are aware of this issue with Oppenheimer reiterating a price target below $1 and William Blair also believes the news is being misread.  The short squeeze thesis also looks overdone.   #stocks #investing #stockmarket #overlookedalpha #finance

Transcript

00:00 BigBear.ai rose 260% last Thursday in one of the biggest moves of the week, but the

00:06 story isn't quite what it seems. The main catalyst for the move is an apparent contract

00:11 win with the US Air Force worth $900 million. There was also some chatter online about the

00:17 stock being a potential short squeeze, but the $900 million award does not mean $900

00:23 million in revenue is coming in. It's what's called an IDIQ contract which means "indefinite

00:29 delivery, indefinite quantity". As BigBear itself said, the company has simply been selected

00:35 to compete for orders. Financials are not compelling either. The company has growing

00:40 losses, a decent chunk of long term debt and increasing share dilution. Overall, this AI

00:46 business is big on buzzwords, but unless you think BigBear can start to win new contracts,

00:51 we think it's best to avoid this stock entirely. But these are personal opinions, not financial

00:57 advice and we hold no position in this stock.

Category

Transcript

Comments

Recommended