Is BigBear.ai a Solid AI Stock for 2025?

Published Date : 01/01/2025 

BigBear.ai has seen impressive gains in 2024, but can these continue into 2025? Let's dive into the company's growth prospects and performance. 

Introduction to BigBear.ai

BigBear.ai (NYSE BBAI) has been a rising star in the data analytics sector, particularly in the realm of artificial intelligence (AI).

The stock has seen a remarkable 128% increase over the past 52 weeks, making it a topic of interest for many investors.

But can this momentum continue in 2025? Let's delve deeper into the company's background, performance, and future prospects.

of BigBear.ai

BigBear.ai isn't a household name, but its roots trace back to the 1980s.

The company as it is today was formed in 2020 when a special purpose acquisition company (SPAC) called Lake Acquisition acquired several AI-based business intelligence firms.

These acquisitions included the makers of the ProModel process simulation package and the tech consulting services of the Open Solutions Group, both of which have been operating since the late 1980s and early 1990s.

Core Business and Clients

BigBear.ai specializes in AI-driven data analytics services for various sectors, including healthcare, government, and heavy construction.

Notably, the U.S.

Army, Navy, and Air Force are among its largest clients.

The company's systems are designed to manage and organize large-scale resources and operations, often on tight schedules.

This focus on the defense sector, a large and thriving market, positions BigBear.ai as a key player in the industry.

Comparing BigBear.ai to Competitors

To understand BigBear.ai's standing, it's useful to compare it with its peers, such as C3.ai (NYSE AI) and Palantir Technologies (NASDAQ PLTR).

These companies often bid on the same contracts and operate in similar markets.

Here's a snapshot of how BigBear.ai stacks up

| Metric | BigBear.ai | Palantir | C3.ai ||-----------------------|------------|------------|-----------|| Market Cap | $1.14 billion | $174.5 billion | $4.56 billion || One-Year Stock Performance | 114% | 347% | 23% || Revenues (TTM) | $155.0 million | $2.65 billion | $346.5 million || Adjusted Net Income (Loss) | ($57.5 million) | $476.6 million | ($274.4 million) |

Data source Collected from Finviz and YCharts on Dec.

31, 2024.

TTM = trailing 12 months.

Performance and Outlook

Despite its recent stock surge, BigBear.ai is the smallest of the three companies in terms of market cap and revenue.

The stock's rise hasn't been driven by significant business results or new contract wins.

In fact, following its latest earnings report, which met Wall Street's bottom-line expectations but missed revenue targets, the stock fell by nearly 11%.

This highlights the cautious approach investors should take when considering BigBear.ai as an investment.

Future Prospects

While BigBear.ai faces stiff competition, it has a robust presence in the defense sector and is diversified across other growth sectors.

The company's ability to secure and execute large-scale contracts will be crucial for sustaining its growth.

Investors should watch for any new contract announcements and business developments that could boost the company's revenues and profitability.

Conclusion

BigBear.ai's recent performance is impressive, but it's not without risks.

The company's smaller size and recent earnings miss are points to consider.

However, its strong presence in key sectors and potential for new business opportunities make it an intriguing stock to watch in 2025.

Investors should keep a close eye on the company's future performance and market conditions before making any investment decisions. 

Frequently Asked Questions (FAQS):

Q: What is BigBear.ai?

A: BigBear.ai is a data analytics company that specializes in AI-driven services for sectors like healthcare, government, and heavy construction. It was formed in 2020 through the acquisition of several AI-based business intelligence firms.

Q: How has BigBear.ai's stock performed recently?

A: BigBear.ai's stock has seen a remarkable 128% increase over the past 52 weeks, making it a notable performer in the AI sector.

Q: Who are BigBear.ai's main competitors?

A: BigBear.ai's main competitors include C3.ai and Palantir Technologies, both of which operate in similar markets and often bid on the same contracts.

Q: What are the risks of investing in BigBear.ai?

A: Investing in BigBear.ai comes with risks, including a recent earnings miss and its smaller size compared to competitors. The company's future performance will depend on its ability to secure new contracts and improve its revenue and profits.

Q: What sectors does BigBear.ai serve?

A: BigBear.ai serves sectors such as healthcare, government, and heavy construction. Notably, the U.S. Army, Navy, and Air Force are among its largest clients. 

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