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Pomerantz Law Firm Announces the Filing of a Class Action Against BigBear.ai Holdings, Inc. and Certain Officers
Pomerantz Law Firm Announces the Filing of a Class Action Against BigBear.ai Holdings, Inc. and Certain Officers

Associated Press

time3 days ago

  • Business
  • Associated Press

Pomerantz Law Firm Announces the Filing of a Class Action Against BigBear.ai Holdings, Inc. and Certain Officers

NEW YORK, June 02, 2025 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against Holdings, Inc. ('BigBear' or the 'Company') (NYSE: BBAI) and certain officers. The class action, filed in the United States District Court for the Eastern District of Virginia , and docketed under 25-cv-00623, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired BigBear securities between March 31, 2022 and March 25, 2025, both dates inclusive (the 'Class Period'), seeking to recover damages caused by Defendants' violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the 'Exchange Act') and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials. If you are an investor who purchased or otherwise acquired BigBear securities during the Class Period, you have until June 10, 2025 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at To discuss this action, contact Danielle Peyton at [email protected] or 646-581-9980 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased. [Click here for information about joining the class action] BigBear is an artificial intelligence - driven technology solutions company. The Company purportedly offers national security, supply chain management, and digital identity and biometrics solutions. In June 2021, Holdings entered into a merger agreement (the 'Merger Agreement') with GigCapital4, Inc. ('GigCapital4'), a special purpose acquisition company, GigCapital4 Merger Sub Corporation ('Merger Sub'), and BBAI Ultimate Holdings. Pursuant to the Merger Agreement, Merger Sub first merged with and into Holdings, with Holdings being the surviving entity in the merger (the 'First Merger'). Then, immediately following the First Merger, Holdings merged with and into GigCapital4, with GigCapital4 being the surviving entity in the merger (the 'Second Merger,' and together with the First Merger, the 'Mergers,' and together with the other transactions contemplated by the Merger Agreement, the 'Business Combination'). On December 7, 2021, the Mergers were consummated and GigCapital4, Inc. was renamed as Holdings, Inc. Upon completion of the Business Combination, BigBear issued $200 million of unsecured convertible notes—debt instruments that can be converted into equity at a future date—due to mature on December 15, 2026 (the '2026 Convertible Notes' or '2026 Notes'). The 2026 Convertible Notes bear interest at a rate of 6.0% per annum, payable semi-annually, and not including any interest payments that are settled with the issuance of shares, and were convertible into 17,391,304 shares of the Company's common stock at an initial Conversion Price of $11.50. Convertible notes are often classified as long-term debt and as such, consistent with generally accepted accounting principles ('GAAP'), they must be accounted for in a company's quarterly and annual reports as liabilities until they reach maturity, at which point they either convert to equity or are repaid as principal and interest. BigBear uses the Financial Accounting Standards Board's Accounting Standards Codification ('ASC')—the single source of United States ('U.S') GAAP—to account 'for all transactions and events in which it obtains control over one or more other businesses (even if less than 100% ownership is acquired), to recognize the fair value of all assets and liabilities assumed and to establish the acquisition date fair value as of the measurement date.' Accordingly, because the Business Combination qualified as such a transaction, BigBear was required to account for it, and its issuance of the 2026 Convertible Notes therewith, in accordance with the ASC. Under ASC 815-15, an entity is required to bifurcate and separately account for a feature or derivative embedded within a host contract (such as the conversion option within the 2026 Convertible Notes) if: (1) the economic characteristics and risks of the embedded derivative are not clearly and closely related to the economic characteristics of the host contract; (2) the hybrid instrument is not remeasured at fair value under otherwise applicable GAAP with changes in fair value reported in earnings as they occur; and (3) a separate freestanding instrument with the same terms as the embedded derivative would meet the definition of a derivative and would not qualify for a 'derivative scope exception.' An embedded derivative may qualify for a scope exception if, for example, it meets the requirements of ASC 815-40, which covers contracts issued or held by an entity that are both indexed to its own stock and classified in stockholders' equity in its statement of financial position. If an embedded feature qualifies for a derivative scope exception, the entity does not separate it from the host contract and the entity accounts for the entire instrument (assuming no other embedded features require bifurcation) in accordance with other U.S. GAAP. Therefore, whether BigBear was required to bifurcate the conversion option within the 2026 Convertible Notes as a derivative was dependent, in part, upon the conversion option's qualification for a derivative scope exception. The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operations, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) BigBear maintained deficient accounting review policies related to the reporting and disclosure of certain non-routine, unusual, or complex transactions; (ii) as a result, the Company incorrectly determined that the conversion option within the 2026 Convertible Notes qualified for the derivative scope exception under ASC 815-40 and failed to bifurcate the conversion option as required by ASC 815-15; (iii) accordingly, BigBear had improperly accounted for the 2026 Convertible Notes; (iv) the foregoing error caused BigBear to misstate various items in several of the Company's previously issued financial statements; (v) as a result, these financial statements were inaccurate and would likely need to be restated; (vi) BigBear would require extra time and expense to correct the inaccurate financial statements, thereby increasing the risk that the Company would be unable to timely file certain financial reports with the U.S. Securities and Exchange Commission ('SEC'); and (vii) as a result, the Company's public statements were materially false and misleading at all relevant times. On March 18, 2025, BigBear disclosed in a filing with the SEC that certain of the Company's financial statements since fiscal year 2021 should no longer be relied upon and would be restated. Specifically, management identified a material error in the previously reported financial statements related to the accounting treatment of the Company's 2026 Convertible Notes. In addition, BigBear revealed that, as a result of the foregoing, the Company would be unable to timely file its Annual Report for 2024 (the '2024 10-K') 'without unreasonable effort or expense.' On this news, BigBear's stock price fell $0.52 per share, or 14.9%, to close at $2.97 per share on March 18, 2025. Then, post-market on March 25, 2025, BigBear filed its 2024 10-K. In discussing the error in the previously reported financial statements, the 2024 10-K stated, in relevant part, that a 'conversion option embedded within the 2026 Notes was incorrectly deemed to be eligible for a scope exception from the bifurcation requirements of ASC 815-15 and therefore requires bifurcation as a derivative (' 2026 Notes Conversion Option ')' and that '[t]he 2026 Notes include certain adjustments to the conversion rate that violate the 'fixed-for-fixed' criteria described in [ASC] 815-40.' As a result, the consolidated financial statements were restated 'to reflect the issuance of the 2026 Notes Conversion Option at fair value as of December 7, 2021 and the subsequent remeasurement to fair value at each reporting date.' The 2024 10-K further revealed that the adjustments reflected in the restatements related to, among other items, accumulated deficit, derivative liabilities, deferred tax liabilities, net loss, interest expense, and amortization of debt issuance discount. Finally, the 2024 10-K disclosed that the Company had identified a material weakness in its internal control over financial reporting—specifically, that BigBear had not 'consistently executed [its] technical accounting review policies, inclusive of the application of certain interpretations subject to significant judgement or differences in interpretation, at a precision level sufficient to achieve complete, accurate and timely financial accounting, reporting and disclosures of certain non-routine, unusual, or complex transactions.' On this news, BigBear's stock price fell $0.32 per share, or 9.11%, to close at $3.19 per share on March 26, 2025. Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered billions of dollars in damages awards on behalf of class members. See Attorney advertising. Prior results do not guarantee similar outcomes. CONTACT: Danielle Peyton Pomerantz LLP

BBAI DEADLINE: ROSEN, TOP RANKED INVESTOR COUNSEL, Encourages BigBear.ai Holdings, Inc. Investors to Secure Counsel Before Important June 10 Deadline in Securities Class Action
BBAI DEADLINE: ROSEN, TOP RANKED INVESTOR COUNSEL, Encourages BigBear.ai Holdings, Inc. Investors to Secure Counsel Before Important June 10 Deadline in Securities Class Action

Associated Press

time3 days ago

  • Business
  • Associated Press

BBAI DEADLINE: ROSEN, TOP RANKED INVESTOR COUNSEL, Encourages BigBear.ai Holdings, Inc. Investors to Secure Counsel Before Important June 10 Deadline in Securities Class Action

New York, New York--(Newsfile Corp. - June 1, 2025) - WHY: Rosen Law Firm, a global investor rights law firm, reminds purchasers of securities of Holdings, Inc. (NYSE: BBAI) between March 31, 2022 and March 25, 2025, both dates inclusive (the 'Class Period'), of the important June 10, 2025 lead plaintiff deadline. SO WHAT: If you purchased securities during the Class Period you may be entitled to compensation without payment of any out of pocket fees or costs through a contingency fee arrangement. WHAT TO DO NEXT: To join the class action, go to or call Phillip Kim, Esq. at 866-767-3653 or email [email protected] for more information. A class action lawsuit has already been filed. If you wish to serve as lead plaintiff, you must move the Court no later than June 10, 2025. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. WHY ROSEN LAW: We encourage investors to select qualified counsel with a track record of success in leadership roles. Often, firms issuing notices do not have comparable experience, resources, or any meaningful peer recognition. Many of these firms do not actually litigate securities class actions, but are merely middlemen that refer clients or partner with law firms that actually litigate the cases. Be wise in selecting counsel. The Rosen Law Firm represents investors throughout the globe, concentrating its practice in securities class actions and shareholder derivative litigation. Rosen Law Firm achieved the largest ever securities class action settlement against a Chinese Company at the time. Rosen Law Firm was Ranked No. 1 by ISS Securities Class Action Services for number of securities class action settlements in 2017. The firm has been ranked in the top 4 each year since 2013 and has recovered hundreds of millions of dollars for investors. In 2019 alone the firm secured over $438 million for investors. In 2020, founding partner Laurence Rosen was named by law360 as a Titan of Plaintiffs' Bar. Many of the firm's attorneys have been recognized by Lawdragon and Super Lawyers. DETAILS OF THE CASE: According to the lawsuit, throughout the Class Period, defendants made false and misleading statements and/or failed to disclose that: (1) maintained deficient accounting review policies related to the reporting and disclosure of certain non-routine, unusual, or complex transactions; (2) as a result, incorrectly determined that the conversion option within the 2026 Convertible Notes qualified for the derivative scope exception under Accounting Standards Codification ('ASC') 815-40 and failed to bifurcate the conversion option as required by ASC 815-15; (3) accordingly, had improperly accounted for the 2026 Convertible Notes; (4) the foregoing error caused to misstate various items in several of previously issued financial statements; (5) as a result, these financial statements were inaccurate and would likely need to be restated; (6) would require extra time and expense to correct the inaccurate financial statements, thereby increasing the risk that would be unable to timely file certain financial reports with the SEC; and (7) as a result, public statements were materially false and misleading at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages. To join the class action, go to or call Phillip Kim, Esq. at 866-767-3653 or email [email protected] for more information. No Class Has Been Certified. Until a class is certified, you are not represented by counsel unless you retain one. You may select counsel of your choice. You may also remain an absent class member and do nothing at this point. An investor's ability to share in any potential future recovery is not dependent upon serving as lead plaintiff. Follow us for updates on LinkedIn: on Twitter: or on Facebook: Attorney Advertising. Prior results do not guarantee a similar outcome. ------------------------------- Contact Information: Laurence Rosen, Esq. Phillip Kim, Esq. The Rosen Law Firm, P.A. 275 Madison Avenue, 40th Floor New York, NY 10016 Tel: (212) 686-1060 Toll Free: (866) 767-3653 Fax: (212) 202-3827 [email protected] To view the source version of this press release, please visit

BBAI DEADLINE: ROSEN, LEADING INVESTOR RIGHTS COUNSEL, Encourages BigBear.ai Holdings, Inc. Investors to Secure Counsel Before Important June 10 Deadline in Securities Class Action
BBAI DEADLINE: ROSEN, LEADING INVESTOR RIGHTS COUNSEL, Encourages BigBear.ai Holdings, Inc. Investors to Secure Counsel Before Important June 10 Deadline in Securities Class Action

Associated Press

time5 days ago

  • Business
  • Associated Press

BBAI DEADLINE: ROSEN, LEADING INVESTOR RIGHTS COUNSEL, Encourages BigBear.ai Holdings, Inc. Investors to Secure Counsel Before Important June 10 Deadline in Securities Class Action

New York, New York--(Newsfile Corp. - May 30, 2025) - WHY: Rosen Law Firm, a global investor rights law firm, reminds purchasers of securities of Holdings, Inc. (NYSE: BBAI) between March 31, 2022 and March 25, 2025, both dates inclusive (the 'Class Period'), of the important June 10, 2025 lead plaintiff deadline. SO WHAT: If you purchased securities during the Class Period you may be entitled to compensation without payment of any out of pocket fees or costs through a contingency fee arrangement. WHAT TO DO NEXT: To join the class action, go to or call Phillip Kim, Esq. at 866-767-3653 or email [email protected] for more information. A class action lawsuit has already been filed. If you wish to serve as lead plaintiff, you must move the Court no later than June 10, 2025. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. WHY ROSEN LAW: We encourage investors to select qualified counsel with a track record of success in leadership roles. Often, firms issuing notices do not have comparable experience, resources, or any meaningful peer recognition. Many of these firms do not actually litigate securities class actions, but are merely middlemen that refer clients or partner with law firms that actually litigate the cases. Be wise in selecting counsel. The Rosen Law Firm represents investors throughout the globe, concentrating its practice in securities class actions and shareholder derivative litigation. Rosen Law Firm achieved the largest ever securities class action settlement against a Chinese Company at the time. Rosen Law Firm was Ranked No. 1 by ISS Securities Class Action Services for number of securities class action settlements in 2017. The firm has been ranked in the top 4 each year since 2013 and has recovered hundreds of millions of dollars for investors. In 2019 alone the firm secured over $438 million for investors. In 2020, founding partner Laurence Rosen was named by law360 as a Titan of Plaintiffs' Bar. Many of the firm's attorneys have been recognized by Lawdragon and Super Lawyers. DETAILS OF THE CASE: According to the lawsuit, throughout the Class Period, defendants made false and misleading statements and/or failed to disclose that: (1) maintained deficient accounting review policies related to the reporting and disclosure of certain non-routine, unusual, or complex transactions; (2) as a result, incorrectly determined that the conversion option within the 2026 Convertible Notes qualified for the derivative scope exception under Accounting Standards Codification ('ASC') 815-40 and failed to bifurcate the conversion option as required by ASC 815-15; (3) accordingly, had improperly accounted for the 2026 Convertible Notes; (4) the foregoing error caused to misstate various items in several of previously issued financial statements; (5) as a result, these financial statements were inaccurate and would likely need to be restated; (6) would require extra time and expense to correct the inaccurate financial statements, thereby increasing the risk that would be unable to timely file certain financial reports with the SEC; and (7) as a result, public statements were materially false and misleading at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages. To join the class action, go to or call Phillip Kim, Esq. at 866-767-3653 or email [email protected] for more information. No Class Has Been Certified. Until a class is certified, you are not represented by counsel unless you retain one. You may select counsel of your choice. You may also remain an absent class member and do nothing at this point. An investor's ability to share in any potential future recovery is not dependent upon serving as lead plaintiff. Follow us for updates on LinkedIn: on Twitter: or on Facebook: Attorney Advertising. Prior results do not guarantee a similar outcome. ------------------------------- Contact Information: Laurence Rosen, Esq. Phillip Kim, Esq. The Rosen Law Firm, P.A. 275 Madison Avenue, 40th Floor New York, NY 10016 Tel: (212) 686-1060 Toll Free: (866) 767-3653 Fax: (212) 202-3827 [email protected] To view the source version of this press release, please visit

3 High-Powered AI Stocks That Could Be the Next Palantir Technologies
3 High-Powered AI Stocks That Could Be the Next Palantir Technologies

Yahoo

time25-05-2025

  • Business
  • Yahoo

3 High-Powered AI Stocks That Could Be the Next Palantir Technologies

Palantir Technologies has taken the investing world by storm, thanks to its innovative use of artificial intelligence in the data analytics arena. These three AI stocks could be the next Palantir Technologies. 10 stocks we like better than › Palantir Technologies (NASDAQ: PLTR) has delivered extraordinary returns. Over the past five years, the data analytics company has generated a staggering 1,122% return, transforming an initial investment of $10,000 into $122,200. As a result, the artificial intelligence (AI) powerhouse's stock currently trades at a staggering 222 times forward earnings. The catalyst? Palantir's Artificial Intelligence Platform (AIP), launched in mid-2023, has driven strong revenue growth, including 39% year-over-year growth in the first quarter of 2025. This AI pioneer demonstrates how powerful emerging technology can create massive shareholder value over time. Here are three growth stocks with similar characteristics -- cutting-edge platforms, expanding markets, and the potential for significant returns -- that could be the next Palantir. Holdings (NYSE: BBAI) operates in Palantir's wheelhouse -- AI-powered decision intelligence solutions for government agencies. While the stock has struggled this year, falling 14%, the company's fundamentals tell a different story about its potential as a turnaround play in the lucrative government AI market. serves as a critical technology partner to agencies like the Department of Homeland Security, delivering AI solutions for digital identity verification and national security applications. This government-first approach mirrors Palantir's early strategy, building deep relationships with agencies that have massive budgets and long contract cycles. The company's $385 million backlog provides revenue visibility -- more than 10 times its quarterly revenue run rate. Financially, is showing signs of stabilization. First-quarter revenue grew 5% year over year to $34.8 million, while the company significantly improved its net loss from $127.8 million to $62 million. Management affirmed its 2025 outlook for revenue between $160 million and $180 million, suggesting confidence in execution despite a challenging environment. The company strengthened its balance sheet during the quarter, reducing long-term debt by $58 million and raising $64.7 million in gross proceeds from warrant exercises. With $107.6 million in cash, has the financial flexibility to invest in growth initiatives while government agencies increasingly prioritize AI capabilities. What makes compelling is its position at the intersection of two powerful trends: government digital transformation and AI adoption. As CEO Kevin McAleenan noted, the company is seeing "early and encouraging signs" of momentum in sectors where the company has built deep relationships. With a market cap of $1.1 billion compared to Palantir's $288 billion valuation, trades at a significant discount despite operating in the same high-growth government AI market. Lemonade (NYSE: LMND) employs AI to disrupt the $9 trillion global insurance industry. The company's AI algorithms handle everything from risk assessment to claims processing, sometimes paying claims in as little as three seconds. This technology-first approach creates significant cost advantages over traditional insurers. The company's growth trajectory is strong, despite its stock trading 57% below its 2020 IPO price. Lemonade recently surpassed $1 billion in in-force premium just eight and a half years after selling its first policy, with revenue skyrocketing 2,240% since going public in 2020. Lemonade also now serves over 2.5 million customers, pushing it toward a profitability inflection point, with management guiding toward positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by the end of 2026. What's the key value driver? The real catalyst lies in Lemonade Car, a subsidiary targeting the massive $350 billion U.S. auto insurance market. Early results show promise, with car insurance cross-sales more than doubling in Q1 2025. If Lemonade can capture even a modest share of this market with its AI-first platform, the stock could deliver exceptional long-term returns akin to Palantir. Nebius Group N.V. (NASDAQ: NBIS) is capitalizing on the AI boom by providing the essential infrastructure that powers AI development. The Amsterdam-based company has seen its stock surge 36% year to date as demand for AI cloud services accelerates. In the first quarter of 2025, Nebius delivered explosive revenue growth of 385% year over year to $55.3 million, driven primarily by its core AI infrastructure business. Nebius operates as a full-stack AI cloud platform designed specifically for intensive AI workloads, offering compute, storage, managed services, and tools that AI builders need to develop and run their models. The company's proprietary cloud software architecture and in-house designed hardware differentiate it from traditional cloud providers. Beyond its core platform, Nebius maintains stakes in complementary businesses, including Avride (autonomous vehicles) and TripleTen (tech education). While Nebius remains unprofitable with an adjusted EBITDA loss of $62.6 million in Q1 2025, the company is positioned at the intersection of two powerful trends: the AI infrastructure buildout and the shift toward specialized cloud services. As AI workloads become more complex and demanding, companies increasingly require purpose-built infrastructure rather than general-purpose cloud services, creating a significant opportunity for specialized players like Nebius to capture market share from traditional providers. Nebius thus offers explosive growth potential as the essential pick-and-shovel provider in the AI gold rush, making it a compelling pick for investors seeking the next Palantir-like AI success story. Before you buy stock in consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $640,662!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $814,127!* Now, it's worth noting Stock Advisor's total average return is 963% — a market-crushing outperformance compared to 168% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 George Budwell has positions in Lemonade and Palantir Technologies. The Motley Fool has positions in and recommends Lemonade, Nebius Group, and Palantir Technologies. The Motley Fool has a disclosure policy. 3 High-Powered AI Stocks That Could Be the Next Palantir Technologies was originally published by The Motley Fool

Brokers Suggest Investing in BigBear.ai (BBAI): Read This Before Placing a Bet
Brokers Suggest Investing in BigBear.ai (BBAI): Read This Before Placing a Bet

Yahoo

time23-05-2025

  • Business
  • Yahoo

Brokers Suggest Investing in BigBear.ai (BBAI): Read This Before Placing a Bet

Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter? Let's take a look at what these Wall Street heavyweights have to say about Holdings, Inc. (BBAI) before we discuss the reliability of brokerage recommendations and how to use them to your advantage. currently has an average brokerage recommendation (ABR) of 2.00, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by four brokerage firms. An ABR of 2.00 indicates Buy. Of the four recommendations that derive the current ABR, two are Strong Buy, representing 50% of all recommendations. Check price target & stock forecast for here>>>While the ABR calls for buying it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential. Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation. This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements. With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near -term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision. Although both Zacks Rank and ABR are displayed in a range of 1-5, they are different measures altogether. Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5. Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide. On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks. Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements. Looking at the earnings estimate revisions for the Zacks Consensus Estimate for the current year has declined 14.8% over the past month to -$0.41. Analysts' growing pessimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates lower, could be a legitimate reason for the stock to plunge in the near term. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #4 (Sell) for You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> Therefore, it could be wise to take the Buy-equivalent ABR for with a grain of salt. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Holdings, Inc. (BBAI) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research

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