BigBear.ai (NYSE:BBAI) is nearing a $2 billion valuation after climbing 61.4% in the past month. The market capitalization is at $1.86 billion at the moment, and this is mainly due to an increasing number of investors comparing it to Palantir (NASDAQ:PLTR).
BigBear.ai also received an upgraded price target of $9 from HC Wainwright ($6 previously). And today, the company unveiled an AI-driven forecasting and sentiment analysis technology for both the U.S. military and allied militaries.
Earlier last month, the company partnered up with Easy Lease and Vigilix to integrate AI across industries in the UAE, including software products at multiple ports, land, and air.
Analysts are comparing this momentum in signed contracts to that of Palantir. Both are considered “defense AI” companies. Let’s take a look at whether or not that’s a rational comparison.
The biggest argument against buying BigBear.ai has been its lackluster growth and the significant cash burn. The latter is likely to remain a problem, but its top line could see much more growth as these contracts are fulfilled and revenue flows in.
That said, you need to keep in mind that BBAI stock is not PLTR stock. The balance sheet is much worse, and the company hasn’t been able to convert its backlog growth into sales growth very effectively. Backlog grew 2.5 times from $168 million in 2023 to $385 million in Q1 2025. In comparison, annual sales have only grown by $3 million from 2023 to 2024, and losses widened from $70.6 million to $295.55 million.
Moreover, if PLTR stock starts plateauing, so could BBAI stock. You could buy the stock if you are okay with taking on outsized risk, but I’d wait for its management to issue more shares and extend the cash runway first. The smartest play for BigBear.ai would be to initiate large stock offerings immediately.
Cash sits at $108 million vs. $111 million in debt. BBAI stock would be much more investable if the cash balance were at $250 million to $300 million.
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