Big Bear AI Stock Overvalued Based on Intrinsic Value Calculation

2 months ago

Parkev Tatevosian, CFA

"When you're a company that has a stock price that's inflated or overvalued, you will tend to use your stock when you're making an offer for acquisition because as a manager of your company, you know the real value of your company. And when the stock price is well above your calculation of intrinsic value, you might be more likely to use that to make acquisitions to plug into your company and generate revenue growth. And with Big Bear AI, I calculated an intrinsic value per share for this company at $1.13. And the current market price is $6.16. So, it's well above the intrinsic value per share I calculated. And so, this company, these shares are overvalued in my opinion."

The speaker discusses Big Bear AI's use of its inflated stock price for acquisitions, highlighting that the current market price of $6.16 is significantly above the computed intrinsic value of $1.13 per share. This overvaluation raises concerns about whether the company's acquisition strategy can generate sustainable revenue growth.

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