Bigbear.ai‘s BBAI shares have soared 96.7% in the year-to-date period compared with the Zacks Computer & Technology sector’s return of 33% and the Zacks Computers - IT Services industry’s rise of 19.3%.

The uptick can be attributed to BBAI’s expanding product portfolio and strong network of partners, which continue to drive its growth.

The positive momentum is further supported by BigBear.ai’s ability to capitalize on the growing government investment in AI solutions. The increasing government interest bolsters BigBear’s innovation pipeline and allows it to adapt and extend its capabilities to serve a larger market.

YTD Performance

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Expanding Portfolio Boosts BBAI’s Prospects

BigBear.ai’s expanding portfolio has been a major growth driver for its success, demonstrated by its initiatives across multiple sectors. The company has been consistently enhancing its portfolio organically and inorganically. Earlier in 2024, it enhanced its AI portfolio by acquiring Pangiam Intermediate Holdings, which offers Vision AI for the trade, travel and digital identity market.

In August, BigBear.ai secured a subcontract with Concept Solutions for a $2.4 billion Federal Aviation Administration Information Technology Innovative Procurement Strategic Sourcing contract to enhance IT services, solidifying its role in the government sector.

BigBear.ai also announced a master service agreement with Heathrow to develop advanced AI technologies to enhance security, operational efficiency and traveler experience at Europe’s largest airport. This agreement highlights BigBear.ai’s commitment to applying advanced solutions to critical infrastructure.

In October, BBAI successfully installed its veriScan biometric verification solution at Denver International Airport, deploying it across 14 international departure gates. The installation enhances boarding efficiency for over 46,600 international passengers monthly, leveraging U.S. Customs and Border Protection’s Traveler Verification Service for secure and privacy-conscious identity verification.

Expanding its portfolio beyond the aviation industry, BigBear.ai participated in the U.S. Navy’s Mission Autonomy Proving Ground exercises. During these exercises, the company showcased its ConductorOS platform, which enables AI-driven maritime domain awareness and ensures multi-vendor interoperability. This further emphasized the company's leadership in defense and maritime advancements.

Expanding Clientele to Aid BBAI’s Top Line

BigBear.ai’s focus on expanding its product portfolio has helped it win clients. Its products have been integrated into the solutions of Autodesk ADSK, Amazon AMZN and Palantir PLTR.

Autodesk integrated BBAI’s ProModel Discrete Event Simulator with the AutoCAD platform to simplify the simulation of complex systems within AutoCAD. 

AMZN’s cloud platform, Amazon Web Services (“AWS”), integrated BBAI’s ProModel solution to build AWS ProServe, enabling it to provide AI-driven warehousing.

Palantir integrated BBAI’s Observe, Orient and Dominate products into its Foundry platform to simplify data collection, generate insights and deliver intelligence. 

Autodesk, Amazon and Palantir are the undisputed leaders of the industry. The adoption of BBAI’s products by these giants reflects the quality assurance of its product suite.

In October, BBAI announced a $165.15 million, five-year sole-source prime contract from the U.S. Army to complete the Global Force Information Management Production Services, transitioning legacy systems into a data-centric, intelligent automation platform to enhance force structure decision-making and operational readiness.

BBAI’s 2024 Outlook Looks Dull

BigBear.ai is emerging as a leader in the AI space, and major companies are adopting its products. However, challenging macroeconomic conditions and losses from the Virgin Orbit bankruptcy are expected to impact the company’s top line.

For fiscal 2024, BBAI expects total revenues between $165 million and $180 million.

The Zacks Consensus Estimate for revenues is pegged at $168.57 million, indicating year-over-year growth of 8.64%. 

The consensus mark for fiscal 2024 earnings is pegged at a loss of 75 cents per share, unchanged in the past 30 days.

BigBear.ai Holdings, Inc. Price and Consensus

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BBAI Stock – Buy, Sell or Hold?

BBAI stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.

However, BBAI’s strong portfolio and expanding partner base continuously contribute to its growth prospects, driving top-line growth. This justifies BBAI’s premium valuation.

BBAI shares are also trading above the 50-day and 200-day moving averages, indicating a bullish trend.

BBAI Shares Trade Above 50-Day & 200-Day SMA

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BBAI stock currently carries a Zacks Rank #2 (Buy) and has a Growth Score of B, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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