Why You Shouldn’t Be Buying BigBear.ai Stock

September 30th, 2025 by Trefis Team
BBAI: BigBear.ai logo
BBAI
BigBear.ai

BigBear.ai stock (NYSE: BBAI) has experienced a significant surge, climbing 28% in the past month and delivering over 45% gains so far this year. This recent rally is primarily fueled by the company’s strong position in the growing defense AI market, as it provides key AI-powered solutions to this sector. The stock’s momentum has been further amplified by strong bullish sentiment from retail investors and recent news of key contract wins, including a partnership with the U.S. Navy and a new biometric system at Nashville Airport.

The key question now is the stock’s current appeal: Is BBAI a buy or sell at its current price of approximately $6? While there’s a case for upside potential for Bibgbear.ai, we believe several major concerns make BBAI stock very unattractive at its current price, especially considering its very high valuation. We base this conclusion on a comparison of BBAI’s current valuation with its recent operating performance and historical financial condition. Our analysis across key parameters—Growth, Profitability, Financial Stability, and Downturn Resilience—indicates that BigBear.ai has a Weak overall operating performance and financial condition, as further detailed below.

That being said, if you seek an upside with less volatility than holding an individual stock like BBAI, consider the High Quality Portfolio. It has comfortably outperformed its benchmark—a combination of the S&P 500, Russell, and S&P MidCap indexes—and has achieved returns exceeding 91% since its inception. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics. Separately, see – How Can RIOT Platforms Value Double?

How Does BigBear.ai’s Valuation Look vs. The S&P 500?

Going by what you pay per dollar of sales or profit, BBAI stock looks very expensive compared to the broader market.

How Have BigBear.ai’s Revenues Grown Over Recent Years?

BigBear.ai’s Revenues have fallen over recent years.

  • BigBear.ai has seen its top line grow at an average rate of 1.4% over the last 3 years (vs. increase of 5.3% for S&P 500)
  • Its revenues have grown 3.5% from $147 Mil to $153 Mil in the last 12 months (vs. growth of 5.1% for S&P 500)
  • Also, its quarterly revenues fell 18.4% to $32 Mil in the most recent quarter from $40 Mil a year ago (vs. 6.1% improvement for S&P 500)

How Profitable Is BigBear.ai?

BigBear.ai’s profit margins are considerably worse than most companies in the Trefis coverage universe.

Does BigBear.ai Look Financially Stable?

BigBear.ai’s balance sheet looks very strong.

  • BigBear.ai’s Debt figure was $113 Mil at the end of the most recent quarter, while its market capitalization is $2.1 Bil (as of 9/29/2025). This implies a very strong Debt-to-Equity Ratio of 5.5% (vs. 20.7% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
  • Cash (including cash equivalents) makes up $391 Mil of the $599 Mil in Total Assets for BigBear.ai.  This yields a very strong Cash-to-Assets Ratio of 65.2% (vs. 7.0% for S&P 500)

How Resilient Is BBAI Stock During A Downturn?

BBAI stock has fared much worse than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last seven market crashes.

Inflation Shock (2022)

  • BBAI stock fell 95.0% from a high of $12.69 on 13 April 2022 to $0.63 on 29 December 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
  • The stock is yet to recover to its pre-Crisis high
  • The highest the stock has reached since then is 9.78 on 13 February 2025 and currently trades at around $6.50
  • Also, see – More Downside For Bigbear.ai?

Putting All The Pieces Together: What It Means For BBAI Stock

In summary, BigBear.ai’s performance across the parameters detailed above are as follows:

  • Growth: Inconsistent
  • Profitability: Very Weak
  • Financial Stability: Very Strong
  • Downturn Resilience: Very Weak
  • Overall: Weak

While BBAI has fared weak in the above parameters, you could explore the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.

The Bottom Line

Given that BigBear.ai has performed weakly across the key operating and financial parameters analyzed, and considering its very high current valuation, we believe that the stock is unattractive and currently a poor investment choice.

While it’s possible that we could be wrong in our assessment and the market may continue to assign a high multiple to BBAI due to the surging demand for AI, we believe this presents a significant risk. When considering the company’s history of underperformance during economic downturns combined with its current elevated valuation, investors would likely be better off waiting for a significant price pullback before initiating a position.

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