Shares of BigBear.ai Holdings (NYSE: BBAI) plummeted 5.90% in intraday trading on Tuesday, continuing a downward trend that has seen the stock lose 26% of its value over the past month. The latest drop comes as investors grapple with concerns over the company's high valuation and disappointing revenue outlook.

BigBear.ai Holdings, which has seen a staggering 327% gain over the past year, is now facing scrutiny over its lofty price-to-sales (P/S) ratio of 14.2x. This valuation stands in stark contrast to the broader IT industry, where nearly half of the companies trade at P/S ratios below 2.3x. Analysts point out that this high multiple may be difficult to justify given the company's recent performance and future prospects.

Adding to investor worries is BigBear.ai's inconsistent revenue growth and a gloomy forecast for the coming year. While the company managed to grow revenues by 3.5% last year, its three-year growth record has been flat. More concerning is the projection of a 6.5% revenue contraction in the upcoming year, according to analysts. This expected decline is particularly troubling when compared to the 20% growth anticipated for the rest of the industry. As these factors come to light, market participants are reassessing the sustainability of BigBear.ai's current share price, leading to the recent sell-off.