Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 7 May, 26 | BBAI | Buy | USD 4.11 | USD 4.4 | USD 4.6 | 14 days | Closed |
11.68%
|
*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 for national security, supply chain management, and digital identity markets. It offers supply chain and logistics solutions, such as Data Conflation at Scale, which offers a view of operations enabling real-time tracking of inventory and facilitating predictive analytics to optimize functions, including routes and delivery times; Discrete Event Simulation, a course of action analysis and digital twin solution; and Next-Gen Decision Support solution for macroeconomic and geopolitical forecasting. The company also provides cybersecurity solutions, such as artificial intelligence (AI)-powered/machine-accelerated binary analysis, cyber-physical systems vulnerability testing and evaluation, vulnerability assessment as a service, and specialized services for the department of defense and intelligence community; and autonomous systems solutions, AI/machine learning (ML) decision intelligence solutions, and AI orchestration as a service, as well as specialized consulting services. In addition, it offers digital identity services comprising security solutions specializing in customized digital identity, biometrics, AI/ML, and advanced analytics software and solutions for global trade, travel, and digital identity industries; and Ask Sage Platform, a generative AI platform for secure AI deployment, orchestration, and agentic capabilities across defense, intelligence, and other highly regulated environments. The company was founded in 1988 and is headquartered in McLean, Virginia.
Expansion in Gross Margin: 34.0% in Q1FY26 vs 21.3% in Q1FY25
Growth in Total Backlog: USD 281.9 Mn in Q1FY26 vs USD 248.1 Mn in Q4FY25
Increase in Selling, General and Administrative Expenses: USD 29.2 Mn in Q1FY26 vs USD 22.7 Mn in Q1FY25
Decline in Revenue: USD 34.4 Mn in Q1FY26 vs USD 34.8 Mn in Q1FY25
Key Investment Risk: BigBear.ai remains exposed to risks related to government budget constraints, contract delays or cancellations, integration challenges from acquisitions, evolving procurement policies, and continued operating losses amid heavy dependence on federal and defense-related spending
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 4.11 | 3.65 | 4.4 | 4.6 |
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.
**Target prices may vary by ±0.5% depending on market volatility.
Strengthening National Security and Trade-Focused Positioning: BigBear.ai Holdings, Inc. continued strengthening its position as a specialized defense and security technology company during Q1FY26 by focusing on national security and trade & travel markets. The company secured significant contract wins, including a USD 53 million sole-source classified intelligence community contract and multiple airport-related deployments. Management highlighted continued momentum in mission-ready AI adoption across government and infrastructure sectors, supporting long-term demand visibility and strategic expansion opportunities.
Backlog Expansion Reflects Strong Contract Momentum: The company reported a 14% sequential increase in total backlog to USD 281.9 million in Q1FY26, primarily driven by major classified national security awards. Funded backlog also expanded substantially to USD 79.1 million from USD 54.9 million in Q4FY25, indicating stronger revenue visibility. The growth in backlog reflected continued traction in federal AI contracts, trade security initiatives, and operational technology deployments across transportation and defense-linked industries.
Gross Margin Improvement Driven by Generative AI Business: BigBear.ai delivered significant profitability improvement during Q1FY26, with gross margin expanding to 34.0% from 21.3% in Q1FY25. The margin expansion was primarily supported by higher contribution from Ask Sage’s Generative AI platforms and products following the acquisition completed in late FY25. Management indicated that increasing adoption of higher-margin AI software solutions and improved business mix are contributing positively to operational efficiency and profitability trends.
Balance Sheet Deleveraging Enhances Financial Flexibility: The company materially improved its financial position during the quarter through the settlement of the remaining USD 124.6 million of 2029 convertible notes. Following the conversion, total debt declined sharply while available cash and investments increased to USD 431.5 million as of March 31, 2026. Interest expense also reduced significantly year-over-year, strengthening liquidity and providing the company with additional flexibility to support acquisitions, operational scaling, and technology development initiatives.
Strategic Realignment Supports Execution and Customer Engagement: During Q1FY26, BigBear.ai implemented an internal organizational realignment initiative aimed at improving execution efficiency and increasing alignment between technology, sales, delivery, and customer success teams. The company also launched its “By Operators, for Operators” campaign focused on strengthening relationships with defense and government customers. Management noted that the restructuring is intended to improve agility, accelerate product deployment cycles, and better address evolving operator requirements in high-priority mission environments.
Acquisitions and Product Enhancements Expand AI Capabilities: BigBear.ai continued integrating Ask Sage and CargoSeer acquisitions during Q1FY26 while launching new product capabilities. CargoSeer introduced an air cargo fraud detection solution, while Ask Sage rolled out an enhanced user interface and a new commercial Generative AI platform. The company stated that these integrations are progressing according to plan and are expected to strengthen cross-selling opportunities, enhance platform capabilities, and support future topline growth across commercial and government markets.
Revenue Guidance Maintained Amid Expanding AI Opportunity: Despite relatively stable revenue during the quarter, management reaffirmed FY26 revenue guidance in the range of USD 135 million to USD 165 million, reflecting confidence in the company’s pipeline and execution outlook. BigBear.ai emphasized growing opportunities across AI-enabled national security, trade monitoring, logistics, and operational intelligence applications. The company’s strong liquidity profile, expanding backlog, and increasing exposure to Generative AI solutions position it to capitalize on rising demand for mission-critical AI technologies.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given to BigBear.ai Holdings, Inc. (NYSE: BBAI) at the current market price of USD 4.11, as on 07 May,2026 at 10:43 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 |
-0.02 0.70% | 2.82 | - | - | 14.32 | 2.99 | 12.97 | -3.2576 |
| IBM International Business Machines |
0.33 0.16% | 213.00 | 32.79 | 20.83 | 3.32 | 8.50 | 4.06 | 20.10 |
| ACN Accenture plc |
1.16 0.81% | 144.73 | 16.00 | 14.29 | 1.66 | 3.84 | 1.65 | 9.80 |
| INFY Infosys Ltd ADR |
-0.18 1.57% | 11.31 | 25.55 | 22.78 | 4.20 | 8.01 | 4.10 | 15.87 |
| FJTSY Fujitsu Ltd ADR |
-0.03 0.15% | 20.36 | 23.27 | 14.97 | 0.01 | 3.26 | 1.74 | 11.45 |
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 Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are 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.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels as on May 7, 2026. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned has been achieved and is subject to the factors discussed above.
Note 4: StockNextt reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.
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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