Why BigBear.ai Stock Sank 11.1% Last Month and Has Kept Falling in April

BigBear.ai (NYSE: BBAI) stock got hit with another round of double-digit monthly sell-off in March. The company's share price fell 11.2% in the month, according to data from S&P Global Market Intelligence. Over the same period, the S&P 500 and Nasdaq Composite declined 5.1% and 4.8%, respectively.

BigBear.ai stock sank last month in conjunction with volatility for the broader market and an uninspiring quarterly report. The company's share price was also pressured by bearish analyst coverage. The stock is now down roughly 36% year to date.

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BigBear.ai stock kept heading lower in March

Valuations for the broader stock market moved lower last month in relation to risks connected to the Iran war, and BigBear.ai's specialization as a provider of defense technologies and services wasn't enough to stave off sell-offs. The stock has seen a dramatic valuation pullback since hitting its 52-week high last year amid strong bullish valuation trends for defense artificial intelligence (AI) stocks. The company's share price is currently down roughly 61% from its valuation peak over the last 12 months.

BigBear.ai published its fourth-quarter results after the market closed on March 2, reporting a smaller-than-expected loss on sales that fell far short of the average Wall Street analyst estimate. The business reported a loss of $0.01 per share on sales of $27.3 million, while the average analyst estimate had targeted a per-share loss of $0.06 on revenue of roughly $33.3 million. Sales were down roughly 38% year over year in the quarter.

On the heels of the underwhelming quarterly report, the company received price target downgrades from multiple analysts. H.C. Wainwright published a report on BigBear.ai on March 3, maintaining a neutral rating on the stock but lowering its one-year price target from $8 per share to $6 per share. Cantor Fitzgerald published its own report the same day, lowering its price target from $6 per share to $5 per share and maintaining a neutral rating on the stock.

BigBear.ai has lost more ground in April

As of this writing, BigBear.ai stock is down roughly 1.7% in April. The continued sell-off comes despite the S&P 500 gaining roughly 3.7% and the Nasdaq Composite gaining roughly 4.5%.

While stocks generally got hit hard last month as investors became more risk-averse in response to the Iran war, BigBear.ai's status as a defense services provider may have allowed it to see more moderate declines than it would have in other sets of bearish circumstances. The company's Q4 report arrived with sales that were much weaker than expected, and recent news that the U.S. and Israel have agreed to a two-week ceasefire may be weakening demand for defense-related stocks even as the broader market is rallying.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.