BigBear.ai Plunges 27.93% on Earnings Miss, Army Contract Woes

On August 12, 2025, BigBear.ai Holdings experienced a significant drop of 27.93% in pre-market trading, reflecting a challenging period for the company.

BigBear.ai's second-quarter earnings report revealed a year-over-year revenue decline to $32.5 million, primarily due to disruptions in U.S. Army contracts. This led the company to lower its full-year 2025 guidance, raising concerns among investors about the company's future prospects.

The revenue slide resulted in a net loss of $228.6 million for the quarter, largely attributed to derivative liabilities and a substantial goodwill write-down. The company's sluggish project activity and inconsistent contract renewals within key U.S. Army programs contributed to this financial setback. Executives are now focusing on long-term federal opportunities, such as the Department of Homeland Security’s new $170 billion funding, but near-term challenges remain significant.

Despite analysts generally maintaining a 'buy' view on the stock, the median price target of $4.25 sits 68% below recent trading levels, indicating limited optimism for a quick recovery. The company's results highlight the risks facing defense and IT services stocks tied to government budgets, as delays and spending shifts have left investors cautious. The wide gap between analyst price targets and current share prices suggests more volatile trading ahead for the sector.