BigBear.ai, a company specializing in AI modules for edge networks, has experienced significant fluctuations since its public debut through a merger with a SPAC in December 2021. Initially opening at $9.84, the stock peaked at $12.69 in April 2022 but plummeted to $0.63 by the end of 2022. This decline can be attributed to overambitious revenue projections that were never realized, with actual growth falling short of expectations.
However, BigBear.ai’s stock price has rebounded and currently sits at approximately $6.30 per share. An investment made at its post-merger low could have grown significantly, highlighting the stock’s recovery potential. The company’s AI modules, known as Observe, Orient, and Dominate, are designed to analyze data and predict trends, linking with major analytics firms like Palantir Technologies.
The challenges of a competitive landscape and the bankruptcy of its largest customer, Virgin Orbit, caused setbacks for BigBear.ai. Under the leadership of Mandy Long, who succeeded former CEO Reggie Brothers, the company shifted its strategy. Long focused on stabilizing cash flow, cutting costs, and expanding through the acquisition of Pangiam, aiming to enhance revenue.
The improved financial metrics for 2024 showcase a slow but positive trajectory. Revenue increased, gross margins expanded, and adjusted EBITDA showed major improvements, although it remains in the negative due to increased investments in research and development and integration costs from the Pangiam acquisition. The company’s backlog has notably increased by 30% to $385 million in early 2025 correlating with new government contracts related to digital identity projects and military modernization.
Nonetheless, while BigBear.ai’s backlog and its rise in gross margins suggest potential for growth, the company has faced a significant dilution of shares, raising concerns about long-term value. Moreover, insider activity shows a considerable disparity between shares bought and sold, indicating potential bearish sentiment.
The outlook for BigBear.ai does present signs of stabilization and growth, particularly in its biometrics initiative, suggesting that if the company can secure new contracts and effectively manage its growth, it may continue on its current upward trend. However, caution is warranted for investors looking for long-term stability, as challenges including share dilution and insider sentiment could impact future performance.