BigBear.ai Soars: Is This AI Stock Worth Your Investment in 2025?
Data analytics firm BigBear.ai (NYSE: BBAI) experienced a remarkable rise in 2024. On New Year’s Eve, the stock had surged by 128% over the past year. This impressive gain leaves many investors wondering if the momentum will continue into 2025 and beyond.
Let’s explore BigBear.ai further to assess its growth potential. Is it a smart choice for investors in early 2025?
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Understanding BigBear.ai
BigBear.ai may not be a well-known name, but its foundation dates back to the 1980s. The current iteration of the company was formed in 2020 when a special purpose acquisition company (SPAC) called Lake Acquisition merged with various AI-driven business intelligence firms. This included companies like ProModel, known for process simulation software, and the Open Solutions Group, a tech consulting firm, with roots going back to the early 90s.
Today, BigBear.ai provides AI-powered data analytics for several sectors, including healthcare, government, and construction. Key clients include branches of the U.S. military, whose operations rely on BigBear.ai’s systems to effectively manage equipment and resources, often under tight deadlines.
If you’re drawing comparisons between BigBear.ai and firms like C3.ai (NYSE: AI) or Palantir Technologies (NASDAQ: PLTR), you’re not alone. These companies frequently compete for contracts in the defense sector, which represents a significant opportunity. BigBear.ai, however, also diversifies into other growing markets.
BigBear.ai vs. Key Competitors: A Financial Snapshot
Making comparisons with C3.ai and Palantir raises questions about the scale and success of BigBear.ai. Here’s a look at how the companies stack 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.
BigBear.ai currently holds the smallest market cap among its peers. Despite recent gains, it has not matched the impressive performance of Palantir.
The spike in BigBear.ai’s stock price isn’t necessarily tied to solid business outcomes or new contracts. Following its recent earnings report, which met expectations but fell short on revenue, the stock dropped nearly 11% in the days that followed.
Rather, the stock’s rise is linked to favorable trends in the AI and business intelligence sector. Often, positive news surrounding Palantir has also influenced BigBear.ai’s performance.
Assessing BigBear.ai as a Buying Opportunity
Should you consider purchasing BigBear.ai stock at this moment? The shares appear reasonably priced at 7.2 times sales, quite lower than C3.ai’s 13.2x and Palantir’s 66.1x sales. However, the company is also significantly unprofitable and has a considerable debt burden.
The AI industry as a whole carries inherent risks associated with profitability, as even Palantir operates at lofty price-to-earnings ratios. For companies like BigBear.ai, the focus often shifts to achieving significant revenue growth, an area where it falls short compared to larger rivals:
BBAI Revenue (TTM) data by YCharts
Given these considerations, I would advise against investing in BigBear.ai stock presently. The company is facing several challenges that might be worth monitoring from a distance, at least until the spring of 2025. Alternatives like Palantir and C3.ai may present better opportunities for growth-focused investors looking in the AI space.
Should You Invest $1,000 in BigBear.ai Today?
Before making a decision on BigBear.ai, consider the following:
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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool recommends C3.ai. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
