• The company's share price fell due to efforts to achieve revenue growth.

• Despite the best efforts of multiple CEOs, the company is not profitable.

• The AI ​​analytics market is still promising.

• 10 Better Stocks than Bigbear ›

Many companies selling artificial intelligence (AI) services have seen their stock prices soar in the past few years. AI Data Analysis Company bigbear.ai (NYSE: BBAI) There has been significant volatility seen, but it has also benefited from bullish market sentiment.

The company's share price has soared 142% over the past 12 months, dwarfing the company's return. S&P 500. That said, it has also lost a lot of ground in the last three months, down 24%.

There is no doubt that the recent decline has made some investors wondering that this is a good time to buy BigBear.AI stock or warning signs. The company still has a lot to prove, and here are three reasons why investors should now leave the AI ​​stock alone.

Small companies with fast-growing and demand markets like AI should grow rapidly. However, Bigbear managed to increase its revenue to $34.8 million in the most recent quarter in just one year.

Unfortunately, this seems to be a model for the company. Revenue remained flat in 2023 and grew only 2% in 2024. Management said sales could grow by 7% (at the midpoint of its guidance).

This is incredible growth for such a young AI company. For comparison, AI data analysis company Palantir Technology Sales rose 29% last year to $2.9 billion.

Often, high-growth companies experience many frontline expansions early on, and investors hope this momentum will eventually lead to profits. But with bigbear.ai, sales have grown for years.

BigBear.ai reported that adjusted EBITDA loss in the first quarter was $7 million, worse than the loss of $1.6 million a year ago.

Management said costs are driven primarily by increased R&D expenses and the frequent sales, general and administrative (SG&A) costs. In either case, the company cannot afford these expenses to continue to exceed sales.

This could be a long wait for investors who hope that profits will soon be the same as the astronomical share price returns over the past few years.

This may not be a typical reason investors should avoid companies, but it will certainly add some red flags. Leadership is crucial to the success of a company, so since 2021, Bigbear.ai will be seen under the leadership of the third CEO.