November 12, 2025
When it comes to investing, knowing when to sell is just as important as knowing what to buy. While most financial coverage focuses on buying opportunities, our research team has identified several companies facing significant challenges that investors should consider selling.
These stocks aren’t simply underperforming the market temporarily – they’re facing fundamental business problems, weakening financials, or carrying valuations that don’t match their current reality.
Our analysis isn’t based on short-term price movements or headline reactions. Each company has been thoroughly evaluated using multiple indicators that historically precede major stock declines.
Here are three stocks showing critical warning signs that demand your immediate attention:
BigBear.ai Holdings (BBAI)
BigBear.ai Holdings shows how speculative artificial intelligence stocks trading at extreme valuations become particularly vulnerable when broader market conditions deteriorate and investors reassess whether premium multiples can be justified by companies posting massive losses while revenues actually decline. The stock collapsed over 21% during the week as troubling economic data triggered a flight to quality away from speculative growth names.
The economic backdrop that accelerated the selloff included:
- Record October job cuts of 153,074—highest for that month since 2003 according to Challenger, Gray & Christmas
- University of Michigan Index of Consumer Sentiment hitting a three-year low
- With negative earnings and price-to-sales ratio exceeding 13 times despite market cap approaching $2.5 billion
BigBear.ai represents precisely the type of richly valued, unprofitable company that investors abandon first when economic clouds gather.
The company’s fundamental deterioration extends well beyond macro concerns:
- Sales declined 18.4% year-over-year in most recent quarter
- Cumulative losses over trailing twelve months approached $450 million
- Burning cash at unsustainable rate while simultaneously losing market share
- Failing to capitalize on AI boom that has enriched competitors
This inverse relationship between the AI industry’s explosive growth and BigBear.ai’s contracting revenue base suggests company-specific execution problems that prevent it from participating in the sector’s expansion.
While other AI-focused companies like Palantir Technologies have justified premium valuations through consistent revenue growth and improving profitability metrics, BigBear.ai offers investors only losses, declining sales, and promises about future potential.
Trading at $5.68 per share with a market cap of approximately $2.5 billion, BigBear.ai carries a valuation that assumes the company will somehow reverse both its profitability trajectory and revenue decline to capture meaningful share of the AI market despite showing no evidence of competitive advantages or execution capabilities.
The ongoing government shutdown adds additional uncertainty for a company that likely derives meaningful revenue from government contracts, potentially worsening the revenue declines that have already pressured the stock.
EverCommerce (EVCM)
EverCommerce faces the devastating combination of revenue deterioration and guidance reductions that exposes how cost-cutting can temporarily mask but never solve fundamental top-line weakness in software-as-a-service businesses where growth represents the primary valuation driver.
The company plummeted nearly 20% following third-quarter results:
- Met earnings expectations at $0.03 per share
- Missed revenue targets with sales of $147.5 million
- Fell approximately $450,000 short of analyst estimates
- Declined roughly 16% year-over-year
This revenue miss carries particular significance given that Wall Street had already lowered expectations following previous disappointing quarters, suggesting the company cannot even clear reduced bars as its sales engine continues sputtering.
Management’s updated full-year guidance shows the deteriorating trajectory:
- Now projecting sales between $584 million and $592 million
- Compared to previous forecasts of $581 million to $601 million
- Meaningful reduction at midpoint signals accelerating headwinds rather than stabilization
While EverCommerce simultaneously raised its adjusted EBITDA guidance to $174.5-$179 million from the prior $171-$177 million range, this improvement reflects cost reductions and margin expansion rather than operating leverage from revenue growth.
The 60.70% gross margin shows strong unit economics when the company can acquire and retain customers, but persistent sales declines indicate fundamental problems with product-market fit, competitive positioning, or go-to-market execution that margin improvements cannot resolve.
Trading at $9.35 per share with a market cap of approximately $1.7 billion, EverCommerce illustrates the valuation destruction that inevitably befalls SaaS companies when revenue growth stalls or reverses.
The stock’s decline of roughly 16% year-to-date even before this week’s collapse suggests this represents continuation of an established downtrend rather than an isolated setback, with shares now trading near the 52-week low of $7.66 and threatening to break to new lows.
Karman Space & Defense (KRMN)
Karman Space & Defense shows how momentum stocks built on future promises rather than present profitability can collapse when quarterly results fail to justify astronomical valuations, with shares plummeting over 10% after the defense contractor missed bottom-line expectations despite beating revenue targets.
The company reported third-quarter results that disappointed:
- Earnings of just $0.06 per share versus analyst expectations for $0.11
- Revenue of $121.8 million exceeded $118.1 million consensus estimate
- Management highlighted ending quarter with record funded backlog of $758.2 million (up 30.8% from year-end 2024)
- Yet this pipeline of future work proved insufficient to prevent sell-off
The market’s harsh reaction reflects the precarious position of high-flying stocks that have enjoyed extraordinary runs based largely on narrative rather than demonstrated profitability, with Karman having soared more than 262% from its February IPO through Wednesday before Thursday’s earnings disappointment triggered the reversal.
Wall Street analysts moved swiftly to temper expectations:
- Baird raised price target to $70 from $60—still implying nearly 7% downside from previous day’s close of $74.98
- RBC Capital reduced target to $85 from $93
- Even bulls have grown more cautious about near-term trajectory
The 33.19% gross margin suggests reasonable underlying economics, but the chasm between revenue generation and bottom-line conversion raises fundamental questions about operational efficiency and whether the business model can scale profitably despite the expanding backlog.
Trading at around $71 per share with a market cap of approximately $9.4 billion, Karman carries one of the most extreme valuation multiples in public markets at 491 times trailing earnings.
This represents the type of valuation typically reserved for mature, consistently profitable technology companies with proven business models, not a recently public defense contractor still demonstrating its ability to convert backlog into sustainable earnings.
The combination of persistent earnings misses despite revenue beats, massive valuation multiples that provide no margin for error, and analyst downgrades suggesting professional investors are reassessing the risk-reward profile creates a situation where even modestly disappointing results in upcoming quarters could trigger additional substantial declines.