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BigBear.ai Stock 65% Below Its 52-Week High: Buy the Dip or Stay Away?
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BigBear.ai Holdings, Inc. (BBAI - Free Report) stock has had a rough ride in 2025, declining 18.2% year to date, underperforming both the Zacks Computers - IT Services industry, which is down 5.2%, and the broader Zacks Computer & Technology sector, which has dipped 1.3%. As a result, BBAI now trades nearly 65% below its 52-week high of $10.36 and hovers close to its 52-week low of $1.17.
BBAI YTD Share Price Performance
Image Source: Zacks Investment Research
As a focused artificial intelligence (AI) company, BigBear.ai offers decision intelligence solutions that aim to help organizations make more informed, data-driven decisions. Despite the long-term promise of AI and continued enterprise investment in the space, BBAI faces near-term headwinds. Market volatility in early 2025 has weighed heavily on speculative tech names, especially those still operating at a loss.
In its recently reported first-quarter 2025 results, BigBear.ai posted revenues of $34.8 million, marking a 5% increase from a year ago, but missing analyst expectations by 3.2%. The company recorded an adjusted loss of 10 cents per share, which was wider than the consensus estimate of a 6-cent loss per share. Adjusted EBITDA also deteriorated, falling to a loss of $7 million from a $1.6 million loss last year. This was largely driven by increased R&D spending and ongoing SG&A expenses amid government funding delays. On a GAAP basis, the net loss narrowed significantly to $62 million from $127.8 million a year earlier, though the figure remained impacted by non-cash charges such as derivative losses and stock-based compensation.
As investors weigh on the company’s potential in the AI space against its financial losses and operational uncertainties, the key question remains: Is this recent weakness a buying opportunity, or does more downside risk lie ahead for BigBear.ai?
What’s Hurting BigBear.ai Stock’s Performance?
Profitability Pressured by Delays & Increased Investment: Despite its positioning, BigBear.ai continues to face meaningful headwinds. Revenue remains "lumpy," driven by the timing of government contracts and milestone achievements. The company acknowledged procurement and funding delays due to shifts in federal efficiency mandates—an issue that may persist through the mid-year.
Furthermore, increased R&D expenses, which jumped $3 million year over year in the first quarter, and elevated SG&A from underutilized capacity weighed on margins and operating performance. Recurring SG&A rose to $17.7 million from $13.6 million, partly due to the full-quarter impact of the Pangiam acquisition and continued spending to support unutilized resources caused by government funding delays. Adjusted gross margin declined slightly to 28.6%, and EBITDA losses widened, indicating near-term scalability challenges.
Another ongoing concern is the high degree of non-cash financial activity, including $2.6 million in debt extinguishment losses and growing stock-based compensation, which affects bottom-line optics.
Persistent Challenges in Cost Control and Revenue Recognition Timing: Several structural challenges persist. Elevated operating expenses, especially from hiring and system integration, are weighing heavily on margins. The company cited delays in government funding as a reason for excess staffing costs and underutilized capacity, a scenario that may repeat if fiscal uncertainties continue.
Moreover, a $33 million increase in the fair value of derivative liabilities, primarily due to warrant revaluations and note conversions, contributed to increased volatility in reported results. While these are non-cash items, they significantly impact bottom-line perception and investor sentiment.
The lack of visibility around contract timing and the company’s exposure to federal budget cycles remain material risks, particularly given BigBear.ai’s heavy reliance on public sector clients.
Can the BigBear.ai Stock Stage a Comeback?
Strategic Contracts and AI Expansion: A cornerstone of BigBear.ai’s first-quarter traction was the award of a significant contract to deliver and maintain the Department of Defense Joint Staff J35’s Orion Decision Support Platform. This contract is notable not just for its size but also for its strategic relevance, as it affirms BigBear’s capability to meet high-level defense analytics and decision-making needs.
Additionally, the company deepened relationships in sectors such as shipbuilding and logistics, with expanded work for clients like Austal USA. These engagements showcase how BigBear is leveraging its analytics suite to improve operational efficiency and supply chain visibility in strategically vital industries. Such wins are a testament to the company’s dual strengths — technical AI sophistication and domain-specific expertise.
Internationally, partnerships such as the one with Smith Detection on prohibited item detection are helping the company penetrate global security markets.
BigBear.ai is steadily expanding its footprint through strategic alliances with leading technology firms, reinforcing the credibility and utility of its AI-driven solutions. Major players like Amazon (AMZN - Free Report) , Palantir (PLTR - Free Report) , and Autodesk (ADSK - Free Report) have integrated BigBear.ai’s technologies into their ecosystems, showcasing growing enterprise adoption.
Amazon Web Services (AWS) has embedded BigBear.ai’s ProModel solution into AWS ProServe, leveraging its predictive modeling and real-time analytics to optimize logistics and warehouse operations. In the defense and intelligence space, Palantir has teamed up with BigBear.ai to strengthen its AI capabilities, underscoring the relevance of BBAI’s solutions in high-stakes environments. Additionally, Autodesk is utilizing BigBear.ai’s technology to enhance its design and engineering platforms, highlighting applications in industrial automation and complex system simulation.
This momentum aligns with the company’s dual-pronged 2025 strategy—fortifying its core U.S. defense and government tech markets while branching out into commercial and international verticals. CEO Kevin McAleenan emphasized a mission-driven innovation model that blends advanced AI with operational understanding, giving the company an edge in domains like border security and supply chain intelligence.
Innovation-Focused Product Portfolio Gains Traction: The company’s broad and expanding portfolio of AI products also served as a key driver. Platforms like Pangiam Threat Detection, ProModel AI, ConductorOS, and Shipyard.ai are designed to solve complex logistics, analytics, and decision-making challenges across both government and commercial sectors. Some of these products, particularly veriScan and Trueface, contributed directly to revenue gains this quarter.
Importantly, several R&D projects have now transitioned into general availability, which could enhance monetization and adoption rates going forward. This shift from pure R&D to deployable solutions underscores BigBear.ai’s ability to commercialize innovation and move up the technology maturity curve.
Estimates Show Bearish Trend for BBAI Stock
The Zacks Consensus Estimate for 2025 loss per share is pegged at 41 cents, which has widened from 21 cents in the past 30 days. Yet, the estimated figure indicates a narrower loss from a loss of $1.10 per share a year ago.
Image Source: Zacks Investment Research
BBAI Stock’s Valuation
In terms of the forward 12-month price/sales (P/S), BBAI is trading at 6.07X, higher than its three-year median of 1.90X but lower than the Zacks Computer and Technology sector’s 6.17X. BBAI currently has a Value Score of F.
Image Source: Zacks Investment Research
How to Play BBAI Stock Now?
Despite BigBear.ai's promising strategic alliances and expanding AI product portfolio, the near-term outlook remains challenged by weak financial performance, lack of profitability, and structural risks. The company’s wider-than-expected first-quarter losses, deteriorating EBITDA, and contracting gross margins point to scalability issues amid persistent delays in government funding. Operational inefficiencies, including elevated SG&A and underutilized capacity, have significantly pressured margins, while non-cash derivative losses and stock-based compensation further distort true profitability.
With revenue growth falling short and cost controls still elusive, the path to sustainable earnings remains uncertain. The stock’s 65% plunge from its 52-week high, combined with a bearish shift in 2025 earnings estimates, suggests sentiment may worsen before stabilizing. Valuation also appears stretched relative to its historical average, with a high forward P/S and an unfavorable Value Score of F. Until BigBear.ai demonstrates consistent execution and margin recovery, risk-averse investors would be better off exiting their positions. BBAI stock currently has a Zacks Rank #4 (Sell).
Image: Bigstock
BigBear.ai Stock 65% Below Its 52-Week High: Buy the Dip or Stay Away?
BigBear.ai Holdings, Inc. (BBAI - Free Report) stock has had a rough ride in 2025, declining 18.2% year to date, underperforming both the Zacks Computers - IT Services industry, which is down 5.2%, and the broader Zacks Computer & Technology sector, which has dipped 1.3%. As a result, BBAI now trades nearly 65% below its 52-week high of $10.36 and hovers close to its 52-week low of $1.17.
BBAI YTD Share Price Performance
Image Source: Zacks Investment Research
As a focused artificial intelligence (AI) company, BigBear.ai offers decision intelligence solutions that aim to help organizations make more informed, data-driven decisions. Despite the long-term promise of AI and continued enterprise investment in the space, BBAI faces near-term headwinds. Market volatility in early 2025 has weighed heavily on speculative tech names, especially those still operating at a loss.
In its recently reported first-quarter 2025 results, BigBear.ai posted revenues of $34.8 million, marking a 5% increase from a year ago, but missing analyst expectations by 3.2%. The company recorded an adjusted loss of 10 cents per share, which was wider than the consensus estimate of a 6-cent loss per share. Adjusted EBITDA also deteriorated, falling to a loss of $7 million from a $1.6 million loss last year. This was largely driven by increased R&D spending and ongoing SG&A expenses amid government funding delays. On a GAAP basis, the net loss narrowed significantly to $62 million from $127.8 million a year earlier, though the figure remained impacted by non-cash charges such as derivative losses and stock-based compensation.
As investors weigh on the company’s potential in the AI space against its financial losses and operational uncertainties, the key question remains: Is this recent weakness a buying opportunity, or does more downside risk lie ahead for BigBear.ai?
What’s Hurting BigBear.ai Stock’s Performance?
Profitability Pressured by Delays & Increased Investment: Despite its positioning, BigBear.ai continues to face meaningful headwinds. Revenue remains "lumpy," driven by the timing of government contracts and milestone achievements. The company acknowledged procurement and funding delays due to shifts in federal efficiency mandates—an issue that may persist through the mid-year.
Furthermore, increased R&D expenses, which jumped $3 million year over year in the first quarter, and elevated SG&A from underutilized capacity weighed on margins and operating performance. Recurring SG&A rose to $17.7 million from $13.6 million, partly due to the full-quarter impact of the Pangiam acquisition and continued spending to support unutilized resources caused by government funding delays. Adjusted gross margin declined slightly to 28.6%, and EBITDA losses widened, indicating near-term scalability challenges.
Another ongoing concern is the high degree of non-cash financial activity, including $2.6 million in debt extinguishment losses and growing stock-based compensation, which affects bottom-line optics.
Persistent Challenges in Cost Control and Revenue Recognition Timing: Several structural challenges persist. Elevated operating expenses, especially from hiring and system integration, are weighing heavily on margins. The company cited delays in government funding as a reason for excess staffing costs and underutilized capacity, a scenario that may repeat if fiscal uncertainties continue.
Moreover, a $33 million increase in the fair value of derivative liabilities, primarily due to warrant revaluations and note conversions, contributed to increased volatility in reported results. While these are non-cash items, they significantly impact bottom-line perception and investor sentiment.
The lack of visibility around contract timing and the company’s exposure to federal budget cycles remain material risks, particularly given BigBear.ai’s heavy reliance on public sector clients.
Can the BigBear.ai Stock Stage a Comeback?
Strategic Contracts and AI Expansion: A cornerstone of BigBear.ai’s first-quarter traction was the award of a significant contract to deliver and maintain the Department of Defense Joint Staff J35’s Orion Decision Support Platform. This contract is notable not just for its size but also for its strategic relevance, as it affirms BigBear’s capability to meet high-level defense analytics and decision-making needs.
Additionally, the company deepened relationships in sectors such as shipbuilding and logistics, with expanded work for clients like Austal USA. These engagements showcase how BigBear is leveraging its analytics suite to improve operational efficiency and supply chain visibility in strategically vital industries. Such wins are a testament to the company’s dual strengths — technical AI sophistication and domain-specific expertise.
Internationally, partnerships such as the one with Smith Detection on prohibited item detection are helping the company penetrate global security markets.
BigBear.ai is steadily expanding its footprint through strategic alliances with leading technology firms, reinforcing the credibility and utility of its AI-driven solutions. Major players like Amazon (AMZN - Free Report) , Palantir (PLTR - Free Report) , and Autodesk (ADSK - Free Report) have integrated BigBear.ai’s technologies into their ecosystems, showcasing growing enterprise adoption.
Amazon Web Services (AWS) has embedded BigBear.ai’s ProModel solution into AWS ProServe, leveraging its predictive modeling and real-time analytics to optimize logistics and warehouse operations. In the defense and intelligence space, Palantir has teamed up with BigBear.ai to strengthen its AI capabilities, underscoring the relevance of BBAI’s solutions in high-stakes environments. Additionally, Autodesk is utilizing BigBear.ai’s technology to enhance its design and engineering platforms, highlighting applications in industrial automation and complex system simulation.
This momentum aligns with the company’s dual-pronged 2025 strategy—fortifying its core U.S. defense and government tech markets while branching out into commercial and international verticals. CEO Kevin McAleenan emphasized a mission-driven innovation model that blends advanced AI with operational understanding, giving the company an edge in domains like border security and supply chain intelligence.
Innovation-Focused Product Portfolio Gains Traction: The company’s broad and expanding portfolio of AI products also served as a key driver. Platforms like Pangiam Threat Detection, ProModel AI, ConductorOS, and Shipyard.ai are designed to solve complex logistics, analytics, and decision-making challenges across both government and commercial sectors. Some of these products, particularly veriScan and Trueface, contributed directly to revenue gains this quarter.
Importantly, several R&D projects have now transitioned into general availability, which could enhance monetization and adoption rates going forward. This shift from pure R&D to deployable solutions underscores BigBear.ai’s ability to commercialize innovation and move up the technology maturity curve.
Estimates Show Bearish Trend for BBAI Stock
The Zacks Consensus Estimate for 2025 loss per share is pegged at 41 cents, which has widened from 21 cents in the past 30 days. Yet, the estimated figure indicates a narrower loss from a loss of $1.10 per share a year ago.
Image Source: Zacks Investment Research
BBAI Stock’s Valuation
In terms of the forward 12-month price/sales (P/S), BBAI is trading at 6.07X, higher than its three-year median of 1.90X but lower than the Zacks Computer and Technology sector’s 6.17X. BBAI currently has a Value Score of F.
Image Source: Zacks Investment Research
How to Play BBAI Stock Now?
Despite BigBear.ai's promising strategic alliances and expanding AI product portfolio, the near-term outlook remains challenged by weak financial performance, lack of profitability, and structural risks. The company’s wider-than-expected first-quarter losses, deteriorating EBITDA, and contracting gross margins point to scalability issues amid persistent delays in government funding. Operational inefficiencies, including elevated SG&A and underutilized capacity, have significantly pressured margins, while non-cash derivative losses and stock-based compensation further distort true profitability.
With revenue growth falling short and cost controls still elusive, the path to sustainable earnings remains uncertain. The stock’s 65% plunge from its 52-week high, combined with a bearish shift in 2025 earnings estimates, suggests sentiment may worsen before stabilizing. Valuation also appears stretched relative to its historical average, with a high forward P/S and an unfavorable Value Score of F. Until BigBear.ai demonstrates consistent execution and margin recovery, risk-averse investors would be better off exiting their positions. BBAI stock currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.