BigBear.ai Inventory Rises 36% in 6 Months: Is It Nonetheless a Purchase?

BigBear.ai Holdings, Inc. BBAI has loved a pointy rebound over the previous six months, rising almost 36% and outperforming main benchmarks, together with the S&P 500, the Zacks Pc and Know-how sector and even the Zacks Computer systems – IT Companies business. With the inventory buying and selling round $5.79 (as of Dec. 2) and remaining properly above its 200-day transferring common, traders are weighing whether or not the rally nonetheless has room to run or if the upside is beginning to plateau.

The corporate’s latest momentum is supported by bettering earnings expectations, a strengthened steadiness sheet and a probably transformative acquisition. But it additionally faces challenges, together with income stress, authorities funding uncertainty and execution danger.

BBAI Inventory’s 6-Month Efficiency

Picture Supply: Zacks Funding Analysis

Momentum Strengthened by Technically Constructive Tendencies

Over the previous half-year, BigBear.ai inventory’s efficiency has been supported by a marked enchancment in investor sentiment and a good technical setup. The chart exhibits that the inventory is buying and selling properly above its 200-day transferring common, which stands close to $5.29, indicating a constructive long-term uptrend. On the identical time, shares now sit barely under the 50-day transferring common of about $6.75, reflecting a short-term pause following a powerful run.

The inventory’s technical setup in 2025 has been risky. The chart exhibits a pointy soar in February, adopted by a protracted consolidation part by means of spring. Momentum returned in July, with a gentle climb into September and October, reflecting rising investor confidence as BigBear.ai outlined its acquisition plans and capital-raising efforts. The latest pullback locations the inventory in a zone the place quantity has risen meaningfully—close to 60 million shares on Dec. 2, in response to the chart information. This surge in buying and selling exercise aligns with heightened curiosity across the Ask Sage acquisition and the corporate’s strengthened liquidity place.

Picture Supply: Zacks Funding Analysis

Earnings Expectations Help the Uptrend for BBAI Inventory

BigBear.ai inventory’s efficiency has been bolstered by a significant shift in analyst forecasts. Over the previous month, expectations for the corporate’s 2025 loss per share narrowed from $1.10 to 93 cents, whereas the anticipated 2026 loss per share improved from 32 cents to 25 cents. The corporate had beforehand posted a lack of $1.10 within the year-ago interval, making the projected trajectory one in every of regular enchancment relatively than abrupt transformation.

Income expectations present a combined image. Analysts anticipate a 16.1% income decline in 2025, reflecting lingering weak spot in sure authorities packages. Nonetheless, the Zacks Consensus Estimate forecasts a 30.2% rebound in 2026, reflecting administration’s confidence that delayed contracts, new authorities funding cycles and up to date strategic strikes will start to contribute extra meaningfully. The mixture of robust share-price beneficial properties and narrowing loss expectations helps clarify why the inventory has considerably outpaced its business and sector friends.

Monetary Profile Strengthened by File Money Ranges

The corporate’s third-quarter 2025 outcomes underscored each operational challenges and monetary progress. Revenues for the third quarter got here in at $33.1 million, declining from $41.5 million in the identical quarter of 2024, a drop administration attributed to decrease exercise on sure Military packages. Gross margin declined from 25.9% to 22.4%, due largely to the absence of a number of higher-margin contracts current within the prior yr.

Regardless of weaker income and margin tendencies, BigBear.ai reported internet earnings of $2.5 million for the quarter in opposition to a lack of $15.1 million a yr earlier. This enchancment didn’t stem from core working power however from favorable non-cash changes, notably adjustments in spinoff valuations. Adjusted EBITDA, which strips out these non-operating objects, remained adverse at $9.4 million, down from constructive $900,000 within the year-ago quarter.

Crucial growth was on the steadiness sheet. BigBear.ai ended the quarter with a report money and investments steadiness of roughly $715 million, together with $456.6 million in money. The corporate’s internet constructive money and investments place reached almost $575 million as of the quarter’s finish, giving it substantial flexibility to pursue progress alternatives and acquisitions. This liquidity was supported by capital raised by means of at-the-market share choices, which offered the corporate with monetary stability and the firepower to behave on its M&A technique.

Ask Sage: A Transformative Guess on Safe Generative AI

Central to BigBear.ai’s long-term technique is its definitive settlement to amass Ask Sage, a fast-growing generative AI platform designed particularly for extremely regulated and labeled environments. Administration emphasised throughout theearnings callthat Ask Sage already helps greater than 100,000 customers throughout 16,000 authorities groups and delivers safe, model-agnostic AI capabilities that combine with main industrial and open-source fashions. Annual recurring income or ARR is on observe to achieve roughly $25 million in 2025, representing a sixfold improve from 2024.

The platform stands out as a result of it gives a safe method for protection and nationwide safety companies to entry one of the best frontier AI fashions with out compromising information confidentiality. The investor presentation notes that Ask Sage holds FedRAMP Excessive accreditation and integrates seamlessly with suppliers reminiscent of OpenAI, Anthropic, Google and AWS. This enables BigBear.ai’s clients to function throughout a number of safety ranges and classification environments.

On the third quarter of 2025earnings name CEO Kevin McAleenan referred to as the acquisition a watershed second, emphasizing that BigBear.ai would achieve not simply new capabilities however a ready-to-scale ecosystem already embedded inside vital U.S. protection infrastructure. He highlighted Ask Sage’s adoption throughout companies such because the U.S. House Drive, NAVAIR, the Protection Well being Company and several other combatant instructions, positioning BigBear.ai to speed up its presence in mission-critical AI functions.

The acquisition is anticipated to shut in late 2025 or early 2026, with the corporate signaling that the first monetary influence will probably be evident in 2026 and past.

Rising Alternatives in Nationwide Safety and Safe Journey

Past Ask Sage, BigBear.ai continues to develop throughout nationwide safety and travel-and-trade markets. The corporate made progress in biometric deployments, with the corporate’s VeriScan platform now working at main airports together with Chicago O’Hare, Seattle-Tacoma and Nashville. These implementations strengthen BigBear.ai’s fame in safe journey infrastructure, an space the place international demand is rising on account of rising safety necessities and digital identification initiatives.

In nationwide safety, the corporate continued to advance platforms reminiscent of Conductor OS and Bain, which give situational consciousness and logistics assist in multi-domain operations. The administration staff highlighted profitable trials in the UK and ongoing initiatives within the Center East, demonstrating the corporate’s worldwide attain. In the meantime, its partnership with the Washington Commanders, which incorporates naming rights for the BigBear.ai Efficiency Middle, provides a brand new dimension to its model visibility.

The corporate’s emphasis on the “One Huge Lovely Invoice”—a significant bundle of federal safety and expertise funding—means that BigBear.ai anticipates expanded contracting alternatives as these packages materialize over the following a number of years.

BigBear.ai’s Challenges: Authorities Publicity

Authorities dependency provides danger. Some contracts, notably inside the intelligence neighborhood, had been quickly paused throughout the federal government shutdown, creating short-term disruptions to income and staffing. Administration acknowledged that federal appropriations uncertainty can create unpredictable timing for contract activations and renewals.

Share dilution is one other difficulty. The corporate issued a big variety of new shares throughout the third quarter to lift capital, bettering liquidity however diluting present shareholders. The necessity to execute the Ask Sage integration successfully whereas navigating uneven authorities spending provides additional complexity.

BBAI Inventory Valuation: Elevated From Historic Ranges however Nonetheless Cheap

BigBear.ai at present trades at a ahead 12-month price-to-sales (P/S) ratio of 14.88. This represents a reduction relative to the broader business’s 16.43X however is way above the corporate’s three-year median of two.17X. Nonetheless, the valuation will not be unreasonable in contrast with different early-stage AI firms working in high-growth, high-security markets. Buyers look like pricing within the potential upside from Ask Sage and the corporate’s rising function in safe AI infrastructure.

BBAI’s P/S Ratio (Ahead 12-Month) vs. Trade

Picture Supply: Zacks Funding Analysis

The place BigBear.ai Stands within the Evolving AI Protection Panorama

BigBear.ai more and more competes with Palantir Applied sciences PLTR, a dominant power in AI-driven protection analytics. Palantir continues to develop its authorities pipeline, and Palantir stays a vital benchmark for safe AI adoption. As BigBear.ai pushes deeper into nationwide safety and generative AI, Palantir stays the closest comparability in scale and mission focus.

One other notable competitor is C3.ai AI. C3.ai maintains a powerful positioning in enterprise AI, and C3.ai has emphasised speedy adoption of AI suites throughout regulated industries. Whereas BigBear.ai strengthens its platform by means of Ask Sage, C3.ai continues to seize industrial AI spending.

Once more, Leidos LDOS stays deeply entrenched in authorities contracting, and Leidos advantages from large multi-year federal packages. As BigBear.ai scales and secures new contracts, Leidos will proceed to be a significant competitor on account of its established protection footprint.

Conclusion

BigBear.ai’s six-month rally displays strengthening fundamentals and rising optimism round its function in safe AI for nationwide safety and controlled industries. The improved steadiness sheet, narrowing losses and transformative Ask Sage acquisition all contribute to a stronger long-term progress outlook.

On the identical time, the corporate stays in a transitional part. Income softness, adverse adjusted EBITDA, contract timing dangers and integration challenges require cautious monitoring. For traders with a long-term horizon and tolerance for volatility, BigBear.ai gives a compelling alternative in a fast-expanding market. For these looking for steadier near-term efficiency, persistence could also be required as this Zacks Rank #2 (Purchase) firm navigates 2025 and builds towards stronger progress in 2026. You’ll be able to see the whole listing of at this time’s Zacks #1 Rank (Sturdy Purchase) shares right here.

Past Nvidia: AI’s Second Wave Is Right here

The AI revolution has already minted millionaires. However the shares everybody is aware of about aren’t more likely to preserve delivering the largest income. Little-known AI companies tackling the world’s largest issues could also be extra profitable within the coming months and years.

See “2nd Wave” AI shares now >>

Need the most recent suggestions from Zacks Funding Analysis? Right this moment, you possibly can obtain 7 Finest Shares for the Subsequent 30 Days. Click on to get this free report

C3.ai, Inc. (AI) : Free Inventory Evaluation Report

Leidos Holdings, Inc. (LDOS) : Free Inventory Evaluation Report

Palantir Applied sciences Inc. (PLTR) : Free Inventory Evaluation Report

BigBear.ai Holdings, Inc. (BBAI) : Free Inventory Evaluation Report

This text initially printed on Zacks Funding Analysis (zacks.com).

Zacks Funding Analysis

The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.