Recommendation: Speculative Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 4 Jun, 25 | BBAI | Speculative Buy | USD 3.85 | USD 4.1 | USD 4.35 | Same day | Closed |
12.99%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
BigBear.ai Holdings, Inc. provides artificial intelligence-powered decision intelligence solutions. It offers national security, supply chain management, and digital identity and biometrics solutions. The company also provides data ingestion, data enrichment, data processing, artificial intelligence, machine learning, predictive analytics, and predictive visualization solutions and services. It serves nation defense and intelligence agencies, border protection, transportation security, manufacturing, distribution and logistics, travel, entertainment, and tourism sectors. The company is headquartered in Columbia, Maryland.
Ending backlog stood at $385 million, indicating strong future revenue visibility
Revenue increased by 5% year-over-year, reaching $34.8 million in Q1 2025
SG&A expenses rose by $5.8 million year-over-year, largely due to funding delays and acquisition integration costs.
Adjusted EBITDA worsened to $(7.0) million, compared to $(1.6) million in Q1 2024
BigBear.ai faces heightened investment risk due to persistent operating losses, delayed government contract funding, and integration costs that significantly pressure cash flow and profitability
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 3.85 | 3.47 | 4.1 | 4.35 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Strategic Focus: BigBear.ai Holdings, Inc emphasized progress in aligning its strategic direction with market opportunities, particularly in areas where it maintains strong client relationships and has proven technology implementations. CEO Kevin McAleenan stated that the company is seeing early signs of positive market response and remains committed to focused, disciplined execution in a dynamic environment.
Revenue Performance and Backlog Growth: In Q1 2025, BigBear.ai reported a 5% year-over-year increase in revenue, totaling $34.8 million compared to $33.1 million in the same period of 2024. This growth was largely attributed to increased activity and awards from the Department of Homeland Security and in the Digital Identity sector. Additionally, the company reported a strong ending backlog of $385 million as of March 31, 2025, reflecting future contracted revenue potential.
Margins and Losses: Gross margin slightly improved to 21.3% in Q1 2025, up from 21.1% in Q1 2024. The net loss for the quarter narrowed significantly to $62.0 million from $127.8 million in Q1 2024. The year-over-year reduction was largely due to the absence of an $85.0 million goodwill impairment charge recorded in the prior year. However, this improvement was partially offset by higher non-cash losses from derivative fair value adjustments ($33.3 million in Q1 2025 vs. $23.8 million in Q1 2024), debt extinguishment costs of $2.6 million, and a $2.2 million increase in equity-based compensation.
Adjusted EBITDA and Operating Expenses: Non-GAAP Adjusted EBITDA stood at $(7.0) million for Q1 2025, a notable decline from $(1.6) million in Q1 2024. This decrease was primarily driven by increased investments in research and development, as well as a rise in Recurring SG&A expenses. The rise in operating expenses reflects delays in government funding, which created excess internal resource capacity, and the integration costs associated with the Pangiam acquisition completed in March 2024.
SG&A and Integration Costs: Selling, General & Administrative (SG&A) expenses increased to $22.7 million in Q1 2025, compared to $16.9 million in the prior year’s quarter. Recurring SG&A expenses rose from $13.6 million to $17.7 million. These increases were attributed to the inclusion of Pangiam’s operational costs and staff expenses not present in Q1 2024, along with additional overhead due to underutilized resources awaiting government contract execution.
Financial Outlook for FY 2025: For the full year ending December 31, 2025, BigBear.ai projects revenue in the range of $160 million to $180 million. Adjusted EBITDA is expected to remain negative, though within the single-digit millions. The company remains focused on strategic alignment, technology deployment, and long-term operational efficiency improvements to drive future growth.
Technical Commentary:
BBAI's stock price found support at key levels and moved higher, indicating a potential upward trend in the near future. The 14-period RSI is trending upward, strengthening the optimistic outlook. Additionally, the stock is above its 21-day Simple Moving Average, which further reinforces a bullish bias and is likely to act as a support level in the short term. Overall, the technical indicators suggest a positive setup for further gains.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Speculative Buy’ rating has been given to BigBear.ai Holdings, Inc. (NYSE: BBAI) at its current market price of USD 3.85 as of June 4, 2025 (7:55 am PDT).
Data Powered by EOD Historical Data (“EODHD”).
Sector: Technology Industry: Information Technology Services
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| BBAI BigBearai Holdings Inc |
0.19 2.51% | 7.75 | - | - | 6.36 | 10.02 | 7.27 | -3.2576 |
| ACN Accenture plc |
2.49 0.82% | 304.78 | 31.75 | 28.09 | 3.49 | 7.94 | 3.45 | 20.00 |
| IBM International Business Machines |
4.32 1.50% | 291.97 | 32.79 | 20.83 | 3.32 | 8.50 | 4.06 | 20.10 |
| FI Fiserv, Inc. |
3.10 1.80% | 175.55 | 28.20 | 15.58 | 4.24 | 2.70 | 5.45 | 13.13 |
| INFY Infosys Ltd ADR |
0.08 0.42% | 18.96 | 25.55 | 22.78 | 4.20 | 8.01 | 4.10 | 15.87 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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