BigBear.ai Holdings, Inc. (BBAI) on Q1 2025 Results - Earnings Call Transcript

Operator: Greetings, and welcome to the BigBear.ai Holdings Incorporated First Quarter ‘25 Earnings Call and Webcast. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce David Cronlow. Thank you, David. You may begin. David Cronlow: Thank you all for joining today for our first quarter 2025 Earnings Call. I'm joined today by our CEO, Kevin McAleenan and our CFO, Julie Peffer. During the call today, we may make certain forward-looking statements. Business cautions not to put undue reliance on forward-looking statements, and Big Bear specifically disclaims any obligation to update the forward-looking statements that may be discussed during this call. Many factors could cause actual events to differ materially from those forward-looking statements, statements that are based on current expectations and assumptions, and as a result are subject to risk and uncertainty. For more information about these risks and uncertainties, please refer to the forward-looking statements section of the earnings press release, which is due today on our SEC filings. We will also discuss some non-GAAP financial measures during the call today. These non-GAAP financial measures should not be considered a replacement for and should be read together with GAAP results. You can find the GAAP and non-GAAP reconciliations within our earnings release. Let me now turn it over to Kevin. Kevin McAleenan : Thank you, David, and good afternoon, everyone. It's a privilege to be speaking with you for the first time as CEO of BigBear.ai. I'm honored to be leading this company at such a pivotal time and excited to share with you how we are positioning BigBear.ai for sustainable growth and long-term performance, and value. Today, I'll start by introducing myself and sharing my perspective on the market and our company. I'll walk through our strategic priorities for 2025 and I'll highlight our progress so far this year, both in terms of growth and key operational improvements. Julie will then review our financial results for the first quarter and I'll provide some brief closing thoughts. Before we begin, a note on our new format for our earnings process. As we begin this next chapter in BigBear.ai's growth, you will notice an evolution in the way we communicate. We are committed to providing more context, greater transparency and a sharper focus on aligning with all of our stakeholders, our shareholders, our employees, our customers and our partners. This approach reflects our sense of accountability to the missions we serve, our excitement to share how we are tackling opportunities and our desire to involve our stakeholders in the path to the long-term success of BigBear.ai. Let me start by sharing a bit about my background and how it shapes my leadership philosophy at BigBear.ai. During my time leading operational government organizations at U.S. Customs and Border Protection and later the Department of Homeland Security, I saw firsthand the power of equipping teams with the right tools and technology, clear direction, and strong support to succeed in complex high stakes environments. Those experiences taught me that technological innovation is critical, but alone, it is not enough. Success comes when technology is fused with operational expertise and a deep understanding of the problem at hand. That belief in the right approach to innovation is what drew me to this critical area of the private sector. I'm convinced that sustaining American economic dynamism and security requires a unique blend of deep subject matter expertise and cutting-edge innovation, applying artificial intelligence and advanced technologies in areas as important as national security and critical infrastructure. It was with that conviction that I co-founded Pangiam, a company dedicated to solving real-world problems at the intersection of AI and security. When Pangiam was acquired by BigBear.ai, I had the opportunity to continue that mission at a larger scale. Over the past year as President of BigBear.ai, I worked closely with our teams, customers and partners and that experience has only deepened my belief in the company's potential and purpose. That same commitment and mission driven innovation will guide my approach as I now lead the company as CEO. At BigBear.ai, we are uniquely positioned at the convergence of artificial intelligence, national security and critical infrastructure. We have a strong foundation of trust with some of the most demanding customers in the world. Our team of over 600 professionals combines exceptional technical capabilities with a deep shared sense of mission and purpose. I cannot be more excited to serve along our outstanding team. Turning to the broader market environment, we are operating at a time of profound change. Change that is creating significant new opportunities, but also challenges and transition turbulence. First, the global security environment is driving a renewed focus and investment in defense technology, creating opportunities to capitalize on American AI innovation to safeguard our security and national interests and those of our allies and partners. Second, there are fundamental transitions underway in global trade, creating demand for smarter, more resilient supply chains powered by automation and dynamic decision-making tools to support the reshoring of key manufacturing sectors, modernization of critical infrastructure and new trading relationships. Third, the imperative to increase the efficiency of operations through technological modernization is being approached with growing urgency across both government and industry, setting the stage for rapid development of new commercial solutions and accelerated technology deployment and implementation of both interoperable and secure open architecture solutions, and importantly, we are starting to see a shift in federal procurement practices with an increased emphasis on efficiency and the adoption of advanced commercial technologies. Across all of these trends, one thing is clear: government and enterprise customers are no longer simply buying software. They are seeking to solve their critical problems with tailored solutions. That is precisely the space where BigBear.ai excels. One of the reasons I'm excited about our path forward is that BigBear.ai is positioned with intention to support and capitalize on these trends. These beliefs about the structural shifts in the market inform the values and principles that shape how we operate, where we invest, and how we lead. At BigBear.ai, we are responding to the macro dynamics with deliberate strategic focus. That's why, as I stepped into this role, I've been centered on a few core tenets that reflect both the demands of the current environment and the opportunities we see ahead.demands First, mission expertise. We believe our deep experience embedded with the supporting national security and critical infrastructure customers we serve is our true competitive edge. We recruit professionals who have lived the missions we serve and equip them with the technology and tools to help enhance them. By bringing operators and technologists together, we are building flexible, mission-driven solutions that can adapt and scale at the pace of technology innovation. Second, international growth. We see a vital opportunity to extend American innovation to our allies and partners around the world. In an era of intensifying technological competition, we have the opportunity and responsibility to ensure American-developed AI technologies are deployed where they can strengthen global stability and shared security. Third, business alliances and partnerships. We will pursue collaborations and remain open to strategic acquisitions that enable us to innovate faster, grow into new areas, and deliver greater value to our customers. And finally, relentless innovation and AI. We're focused on delivering mission-ready AI, operationalizing artificial intelligence in the real world to enable human-machine teaming and bring cutting edge technologies to the point of decision in ways that are timely, adaptable and integrated. Building on these anchors, our growth strategy for 2025 is focused on a clear dual mandate, strengthened within our core markets where we have proven success, while expanding selectively into high-potential adjacencies where our expertise and technology provide a competitive edge. In our core markets, we are continuing to deepen our leadership. In border security, travel, and trade, we continue to support border security missions at the Department of Homeland Security, and we are expanding AI infrastructure at major U.S., and partner nation gateways. Our ability to integrate federal and commercial solutions through the Pangiam portfolio gives us a powerful advantage, creating better, faster solutions for both mission sets. In Defense and Intelligence, we are orchestrating AI at the mission edge, sourcing and fusing critical data and delivering actionable insights directly to the point of need, integrating with emerging AI operating systems, and connecting diverse sensor types to fuse operational data. In manufacturing and supply chain, we are well-positioned to help modernize the American industrial base and streamline global supply chains. Our goal is to improve visibility into challenges, accelerate decision making, and unlock efficiency gains, particularly in critical sectors like shipbuilding. At the same time, we are strategically expanding into new markets. Internationally, we are focused on converting successful pilots into enduring programs, monetizing R&D where export of American innovation is in our national interest and where our national partnerships are strongest, and starting to build regional go-to-market partnerships with leading companies. Domestically, we are pursuing adjacencies that leverage our core competencies, for example, adapting technologies built for one federal agency's needs to address similar challenges in another or introducing innovations developed for the commercial sector into government and vice versa. Our growth is accelerated by a portfolio of technologies, including commercial and software solutions like Pangiam Threat Detection, veriScan, Trueface, Pro Model AI, ConductorOS, and Shipyard.ai, and a suite of underlying assets from computer vision models to data pipelines. Additionally, we believe that a collaborative approach is critical given the pace of innovation and the variety of mission sets we seek to serve. We are focused on working with strategic partners through alliances and joint ventures, and will also consider strategic acquisitions, giving us the ability to move swiftly, precisely, and with a shared risk in a complex dynamic market. As we enter the second quarter, we are seeing early and encouraging signs that our strategic focus is resonating, particularly in sectors where we've built deep relationships, have a clear understanding of the mission, and are deploying proven technologies. In National Security, we secured a significant new contract to deliver and maintain the Department of Defense Joint Staff J35's Orion Decision Support Platform. This award is a powerful validation of our AI capabilities and their direct alignment with mission-critical needs at the highest levels of defense decision making. In manufacturing and shipbuilding, we are deepening our partnerships with key industry players like Austal USA, demonstrating our solutions can drive meaningful impact in industries that are most critical to American interests. On the border and travel security front, we successfully deployed advanced AI solutions at major points of entry and exit, including U.S. Airports like Dallas Fort Worth and Denver International Airport, enhancing operational efficiency and traveler experience while strengthening security postures. We are also proud to support enhanced primary processing for arrivals at Los Angeles International Airport and the Port of Seattle. Internationally, we are beginning to see results from our increased focus. Our collaboration with Smith Detection on applying BigBear.ai automated prohibited item detection using advanced algorithms and integrated with computed tomography scanners is a prime example, unlocking new international distribution channel for our threat detection technologies and helping us accelerate our reach in the global security markets. Given the progress we are seeing across these areas, we are confident in our strategy and we are reaffirming our 2025 full year guidance. We recognize that we are operating in an exceptionally dynamic business and macroeconomic environment, which creates opportunity, but also potential short-term risks. Among these, changes in federal procurement processes and government efficiency efforts are creating temporary variability, including delays in funding and award timing. We remain focused on capitalizing on this dynamic market and driving disciplined, sustained execution. Now, let me turn it over to Julie to share our financial results for this quarter. Julie Peffer: Thank you, Kevin. Now let's turn to our first quarter results. As we have stated in the past, it's important to reemphasize that our revenue can be lumpy and can fluctuate meaningfully depending on the quarter in which contracts are awarded, milestones achieved or contracts complete. Revenue for the quarter was $34.8 million up 5% year-on-year compared to $33.1 million in the first quarter of 2024. This is primarily driven by additional revenue from the Department of Homeland Security and digital identity awards including products such as veriScan and Trueface. Gross profit for the quarter is up 6% from $7 billion in first quarter of 2024 to $7.4 million in the first quarter of 2025. Gross margin was 21.3% this quarter, which is a slight improvement from 21.1% in Q1 2024. Lower reported gross margin in both periods are impacted by higher annual incentive compensation that was settled in the form of stock awards issued in the first quarter, resulting in higher stock-based compensation noncash expense. If you look at adjusted gross margin, which removes the impact of equity compensation, it shows 28.6% in the first quarter of 2025 versus 29.1% in Q1 of 2024. Year-over-year, our R&D spend is up $3 million as we continue to invest in innovation and technology as you have seen over the last few quarters. We have recently progressed some R&D projects into general availability. Therefore, we have fewer projects being capitalized as part of the development cycle in Q1 of 2025. Net loss in the first quarter of 2025 was $62 million compared to the net loss of $127.8 million in the first quarter of 2024. The primary drivers of change in net loss were all non-cash items. In the first quarter of 2024, we booked goodwill impairment charges of $85 million, and this was not repeated in the first quarter of 2025. This is partially offset by higher non cash losses on the increase in the fair value of derivatives of $9.5 million from $23.8 million in Q1 of 2024 to $33.3 million in Q1 of 2025. We also recognized non-cash losses on debt extinguishment of $2.6 million during the first quarter of 2025 related to voluntary conversions by holders of the convertible notes due in 2029. And finally, noncash stock-based compensation expense was higher in Q1 of 2025 versus Q1 of 2024 by $2.2 million. Now turning to adjusted EBITDA. This was negative $7 million for the first quarter of 2025 compared to negative $1.6 million in the first quarter of 2024, primarily driven by increased R&D expense and recurring SG&A due to the government funding delays creating excess resource capacity. Our backlog was $385 million at the end of the first quarter, which is up 30% and $89 million compared to Q1 of 2024, indicating continued customer confidence in our solutions and long-term value proposition. And finally, I want to reinforce the renewed strength of our balance sheet and improved debt position. As shared last quarter, we made significant progress during Q1 to improve our cash position. We ended Q1 with $108 million in cash and cash equivalents, up from $81 million in Q1 of 2024 and $50 million at the end of 2024. The cash position provides us with increased financial flexibility to strategically invest, navigate market uncertainties, and drive long-term value for our shareholders. Our debt position has materially reduced during Q1 as several of our 2029 noteholders opted to convert into equity during Q1, resulting in a reduction of $58 million of debt in the period. The outstanding principal on our convertible notes is $142 million at the end of this quarter, down from $200 million at the end of 2024. These new 2029 notes also provide us with the optionality to settle future interest payments in stock or in cash at our election. This gives us improved financial flexibility and gives us the ability to execute with confidence and discipline as we look ahead. As we mentioned last quarter, we will continue to be responsible with our strengthened balance sheet, and we will look to allocate capital only towards projects that aim to provide material improvement to our shareholder return. And now back to Kevin for a few closing remarks. Kevin McAleenan: Thank you, Julie. As we've shown today, we are positioning BigBear for the long-term, and as we reaffirm our guidance for the full year, I'd like to remind everyone of three key building blocks of the business today. I'd like to highlight our financial foundation as we did in last quarter's CEO letter. We closed the quarter with $108 million in cash and cash equivalents. This is a result of deliberate steps taken to strengthen our balance sheet, enhance liquidity and preserve the strategic flexibility we need to navigate near-term uncertainty while still investing decisively in our future growth. This strong financial footing allows us to be selective, patient, and opportunistic. Second, our backlog and pipeline remain healthy, closing the first quarter with a backlog of $385 million. We're taking a long view with our backlog and pipeline and focusing on building a portfolio of large multiyear programs and deep commercial relationships that provide stable compounding value over time. Third, innovation remains at the core of our identity. We are continuing to blend internal R&D with customer-funded development, while expanding our innovation ecosystem through partnerships that allow us to access cutting-edge technologies and talent across sectors. At BigBear.ai, we are building a durable, high-impact company at the forefront of AI-enabled national security and critical infrastructure modernization. We are doing so with focus, with urgency, and with a foundation that is designed to deliver lasting value for our customers, our partners, our employees, and our shareholders. Thank you for your time today on our first quarter call. Operator:
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BigBear.ai Holdings, Inc. (NYSE:BBAI) Insider Sale and Financial Overview

  • Chief Accounting Officer Ricker Sean Raymond sold 9,515 shares at $3.12 each, still holding 284,124 shares.
  • Wall Street analysts have an average brokerage recommendation (ABR) of 2.00, indicating a Buy rating for BigBear.ai.
  • Despite a negative P/E ratio of -3.99, BigBear.ai has a price-to-sales ratio of 5.59 and a low debt-to-equity ratio of 0.054.

BigBear.ai Holdings, Inc. (NYSE:BBAI) is a key player in the field of AI-powered decision intelligence solutions. The company is known for its innovative approach to enhancing defense capabilities, as demonstrated by its recent collaboration with Hardy Dynamics. This partnership aims to improve AI orchestration for U.S. Army drone swarm operations under Project Linchpin, highlighting BigBear.ai's commitment to national security.

On May 6, 2025, Ricker Sean Raymond, the Chief Accounting Officer of BigBear.ai, sold 9,515 shares of the company's common stock at $3.12 each. Despite this sale, he still holds 284,124 shares. This transaction is publicly documented on the SEC website. Such insider activities can sometimes influence investor sentiment, especially when combined with analyst ratings.

Wall Street analysts have shown optimism towards BigBear.ai, with an average brokerage recommendation (ABR) of 2.00, indicating a Buy rating. Among the four contributing brokerage firms, two have given a Strong Buy recommendation. This positive sentiment could potentially impact the stock's price, as media reports about rating changes often do.

Despite a negative price-to-earnings (P/E) ratio of -3.99, BigBear.ai's price-to-sales ratio of 5.59 suggests that investors are willing to pay $5.59 for every dollar of sales. The enterprise value to sales ratio is 4.98, providing insight into the company's valuation relative to its revenue. However, the enterprise value to operating cash flow ratio is significantly negative at -26.17, indicating challenges in generating positive cash flow.

BigBear.ai's financial metrics reveal some difficulties, with a negative earnings yield of -25.05%. However, the company maintains a low debt-to-equity ratio of 0.054, indicating a relatively low level of debt compared to equity. Additionally, a current ratio of 1.66 suggests that BigBear.ai has a good level of liquidity to cover its short-term liabilities, providing some financial stability amidst its challenges.

BigBear.ai Holdings, Inc. (NYSE:BBAI) Faces Financial Challenges Amid Investigations

  • BigBear.ai's Chief Accounting Officer sold 2,066 shares, amidst ongoing investigations into potential federal securities law violations.
  • The company announced a delay in filing its annual 10-K report and will restate financial results for fiscal years 2022 and 2023, leading to a 14.9% drop in stock price.
  • Financial metrics reveal significant challenges, including a negative price-to-earnings (P/E) ratio of approximately -2.88 and potential liquidity concerns with a current ratio of approximately 0.46.

BigBear.ai Holdings, Inc. (NYSE:BBAI) operates in the artificial intelligence and machine learning sector, offering data-driven decision-making solutions across various industries. Despite its innovative services, the company is currently facing significant financial challenges, highlighted by recent events and investigations.

On April 1, 2025, Ricker Sean Raymond, the Chief Accounting Officer of BigBear.ai, sold 2,066 shares of the company's common stock at $2.90 each. This transaction occurs amid ongoing investigations by Levi & Korsinsky and Pomerantz LLP into potential violations of federal securities laws by BigBear.ai. These investigations were triggered by the company's announcement on March 18, 2025, that it would delay filing its annual 10-K report and restate financial results for fiscal years 2022 and 2023.

The restatement of financial results is due to issues related to the accounting treatment of BigBear.ai's convertible notes due in 2026. This disclosure led to a 14.9% drop in the company's stock price, closing at $2.97 per share on March 18, 2025. The negative impact on the stock price reflects investor concerns about the company's financial health and transparency.

BigBear.ai's financial metrics further highlight its challenges. The company has a negative price-to-earnings (P/E) ratio of approximately -2.88, indicating a lack of profitability. Its price-to-sales ratio is about 5.39, suggesting that investors are paying a premium for each dollar of sales. The enterprise value to sales ratio is slightly lower at 5.14, reflecting the company's valuation, including debt.

Additionally, BigBear.ai's enterprise value to operating cash flow ratio is significantly negative at around -21.34, underscoring difficulties in generating positive cash flow from operations. The negative earnings yield of approximately -34.78% and a negative debt-to-equity ratio of about -4.24 further emphasize the company's financial struggles. The current ratio of approximately 0.46 suggests potential liquidity concerns, as it falls below the standard threshold of 1.

BigBear.ai Holdings, Inc. (NYSE: BBAI) Faces Challenges Despite AI Innovations

  • Dorothy D. Hayes, a director at BigBear.ai, sold 16,000 shares amid a significant share price drop and a wider-than-expected net loss reported in Q4 2024.
  • The company projects revenues between $160 million and $180 million for 2025, with a negative adjusted EBITDA, raising concerns about its profitability trajectory.
  • Despite the challenges, HC Wainwright analyst Scott Buck maintains a Buy rating for BigBear.ai, highlighting the company's potential in defense and intelligence sectors.

BigBear.ai Holdings, Inc. (NYSE:BBAI) is a key player in the field of AI-powered decision intelligence solutions. The company focuses on providing advanced analytics and AI-driven insights to enhance decision-making processes across various sectors, including government and defense. Despite its innovative offerings, BigBear.ai faces stiff competition from other technology firms in the AI and analytics space.

On March 12, 2025, Dorothy D. Hayes, a director at BigBear.ai, sold 16,000 shares of the company's common stock at $3.29 each. This transaction comes amid a challenging period for the company, as highlighted by a significant 25.2% drop in share price following the release of their fourth-quarter 2024 earnings. The earnings report revealed a wider-than-expected net loss of $108 million, a substantial increase from the previous year's loss of $21.3 million.

Despite securing key government AI contracts, BigBear.ai's outlook for 2025 remains concerning. The company projects revenues between $160 million and $180 million, with a negative adjusted EBITDA in the single-digit millions. This raises questions about its profitability trajectory, especially given the current financial metrics. The company's price-to-earnings (P/E) ratio is approximately -3.19, indicating negative earnings, while the price-to-sales ratio stands at about 5.89.

In the fourth quarter of 2024, BigBear.ai reported revenues of $43.8 million, which fell short of the Zacks Consensus Estimate by 19.09%. However, this still marked an 8% increase year over year. The company's shares have plummeted 30.8% year-to-date, contrasting with the Zacks Computer & Technology sector's decline of 9.7% and the Zacks Computers - IT Services industry's rise of 11% during the same period.

Despite these challenges, HC Wainwright analyst Scott Buck maintains a Buy rating for BigBear.ai, albeit with a reduced price target from $7 to $6. Buck remains optimistic about the company's long-term prospects, citing potential benefits from increased investments in sectors like border security, defense, and intelligence. Additionally, BigBear.ai has improved its financial position by de-leveraging through corporate actions, holding approximately $115 million in cash and reducing its debt-to-cash ratio from 4.0x to 1.2x.

BigBear.ai (NYSE:BBAI) Earnings Preview: What to Expect

  • BigBear.ai is projected to report a 33.54% increase in revenue year-over-year, with expectations set at approximately $54.17 million for Q4 2024.
  • The company is expected to post an earnings per share (EPS) of -$0.05, showing an improvement from the previous year's loss.
  • Despite revenue growth, BigBear.ai's financial health indicators such as the negative price-to-earnings (P/E) ratio and negative enterprise value to operating cash flow ratio highlight ongoing profitability and cash flow challenges.

BigBear.ai (NYSE:BBAI) is a company that specializes in artificial intelligence solutions, catering to both commercial and government sectors. As the company prepares to release its fourth-quarter 2024 earnings on March 6, 2025, Wall Street anticipates an earnings per share (EPS) of -$0.05 and revenue of approximately $54.6 million.

The company's revenue is projected to be $54.17 million, a 33.54% increase from the same quarter last year, as highlighted by Zacks. This growth is attributed to an expanding client base and increased government investment in AI solutions. Despite this, the expected loss per share remains at 5 cents, an improvement from the previous year's 14 cents per share loss.

Historically, BigBear.ai has had mixed results, missing the Zacks Consensus Estimate in two of the last four quarters, while exceeding it in the other two. This has resulted in an average negative earnings surprise of 60.72%. The company's negative price-to-earnings (P/E) ratio of -6.91 indicates ongoing losses, while a price-to-sales ratio of 7.65 suggests investors are willing to pay $7.65 for every dollar of sales.

The enterprise value to sales ratio is 8.55, reflecting the company's valuation in relation to its revenue. However, the enterprise value to operating cash flow ratio is significantly negative at -56.67, highlighting challenges in generating cash flow from operations. The earnings yield is -14.47%, further emphasizing the company's current unprofitability.

BBAI's debt-to-equity ratio of 2.09 indicates a higher level of debt compared to equity, while a current ratio of 2.06 suggests the company has a good level of liquidity to cover its short-term liabilities. As the earnings release approaches, investors will be keen to see if the company can meet or exceed expectations.

BigBear.ai's Financial and Stock Performance Analysis

  • BigBear.ai has experienced significant stock price volatility since its SPAC merger, with a notable decline from its peak in April 2022.
  • The company's financial metrics, including a negative P/E ratio of -6.65 and a debt-to-equity ratio of 2.00, highlight its financial challenges and reliance on debt.
  • Despite these challenges, there's an optimistic outlook from some analysts predicting a potential rise in stock price to $7, amidst ongoing volatility and financial difficulties.

BigBear.ai, trading on the NYSE under the symbol BBAI, specializes in AI-oriented analytics tools. The company went public through a SPAC merger three years ago. Initially, the stock traded at $9.84 per share, reaching a high of $12.69 in April 2022. However, it later fell below $1 by the end of that year, raising concerns about its investment potential.

On January 3, 2025, Ricker Sean Raymond, the Chief Accounting Officer of BBAI, sold 2,067 shares at $4.03 each. Despite this sale, he still holds 247,903 shares. This transaction occurred amid a 7.48% decline in BBAI's stock price, reflecting ongoing volatility. The stock is currently trading around $5, with some analysts predicting a rise to $7.

BBAI's financial metrics reveal challenges. The company has a negative P/E ratio of -6.65, indicating losses. Its price-to-sales ratio is 7.32, showing investors pay $7.32 for every dollar of sales. The enterprise value to sales ratio is 8.23, reflecting its valuation relative to revenue. The negative enterprise value to operating cash flow ratio of -54.55 highlights cash flow issues.

Despite these challenges, BBAI's current ratio of 2.06 suggests it can cover short-term liabilities with short-term assets. However, the debt-to-equity ratio of 2.00 indicates reliance on debt for financing. The earnings yield of -15.04% further emphasizes financial difficulties. These factors contribute to the stock's volatility and investment uncertainty.

A Wall Street analyst's optimistic outlook, suggesting a potential rise to $7, contrasts with BBAI's current financial struggles. This mixed sentiment reflects the broader uncertainty surrounding the company's future performance and investment potential.

BigBear.ai (NYSE:BBAI) Experiences Stock Surge Amid Shareholder Sale

  • BigBear.ai (NYSE:BBAI) sees a 19.3% increase in stock price despite significant shareholder sale.
  • The company's financial metrics indicate challenges, with a negative P/E ratio of -6.53 and a price-to-sales ratio of 7.20.
  • Investor optimism may be driven by external factors, including industry moves by competitors like Palantir and a broader market recovery for speculative stocks.

BigBear.ai (NYSE:BBAI) is a software company that specializes in artificial intelligence and machine learning solutions. It operates in a competitive landscape with companies like Palantir, which also focuses on AI-driven data analytics. Recently, BBAI Ultimate Holdings, LLC, a significant shareholder, sold 6,075,697 shares at $4.15 each, yet still retains a substantial holding of 64,157,821 shares.

Despite the sale, BBAI's stock is experiencing a notable surge, with a 19.3% increase as of Thursday afternoon. This rise is significant, especially when compared to the flat performance of the S&P 500 and a modest 0.1% increase in the Nasdaq Composite. The stock's rebound is part of a broader recovery among meme stocks, which faced bearish pressures due to macroeconomic concerns.

The recent surge in BBAI's stock price is likely influenced by news related to Palantir's defense industry plans, as highlighted by The Motley Fool. This development has positively impacted BBAI's valuation, despite the company's financial challenges. BBAI has a negative P/E ratio of -6.53, indicating ongoing losses, and a price-to-sales ratio of 7.20, showing investor willingness to pay a premium for its sales.

BBAI's financial metrics reveal some challenges. The enterprise value to sales ratio is 8.10, and the enterprise value to operating cash flow ratio is significantly negative at -53.69, indicating difficulties in generating cash flow. The earnings yield is -15.31%, further emphasizing financial struggles. However, the company maintains a strong liquidity position with a current ratio of 2.06.

The debt-to-equity ratio of 2.00 suggests that BBAI relies heavily on debt financing. Despite these financial hurdles, the recent stock price surge indicates investor optimism, possibly driven by external factors like Palantir's industry moves and a broader market recovery for speculative stocks.

BigBear.ai and SoundHound AI: A Comparative Analysis of Stock Performance

  • BBAI Ultimate Holdings, LLC sold 2.86 million shares of BigBear.ai (NYSE:BBAI), leaving it with 70.39 million shares.
  • BigBear.ai's stock price has seen a modest increase of 13.71% over the year, with a current market capitalization of approximately $784.3 million.
  • SoundHound AI's stock price has surged approximately eightfold in 2024, significantly outperforming BigBear.ai with a market cap nearing $7 billion.

On December 18, 2024, BBAI Ultimate Holdings, LLC, a significant stakeholder in BigBear.ai (NYSE:BBAI), sold 2.86 million shares of the company's common stock at $3.59 each. This transaction leaves BBAI Ultimate Holdings, LLC with around 70.39 million shares. BigBear.ai operates in the competitive artificial intelligence sector, alongside companies like SoundHound AI.

BigBear.ai's stock price currently stands at $3.13, reflecting a decrease of 7.94% or $0.27. The stock has fluctuated between $2.99 and $3.82 today. Over the past year, it has seen a high of $4.80 and a low of $1.17. Despite these fluctuations, BigBear.ai's market capitalization is approximately $784.3 million.

In comparison, SoundHound AI has experienced a significant increase in its stock price, approximately eightfold throughout 2024, boosting its market cap to nearly $7 billion. BigBear.ai, on the other hand, has seen a more modest increase of 13.71% in its stock price. Both companies started the year with market caps below $1 billion.

BigBear.ai's trading volume on the NYSE is 70.3 million shares, indicating active investor interest. As the competition between BigBear.ai and SoundHound AI intensifies, investors are keenly observing their performance. Both companies are striving for superior market performance as they head into 2025.