Can BigBear.ai's Expanding Federal Clientele Push the Stock Higher?
BigBear.ai BBAI on Monday announced that it has been awarded a five-year, $165.15 million sole-source prime contract by the U.S. Army for Global Force Information Management (GFIM) Production Services.
Building on its previous collaboration with the Army since 2021, where BBAI has worked to transform 15 legacy systems into a unified intelligent automation platform, this contract will further support the development and deployment of GFIM-OE capabilities.
The project aims to deliver a dynamic and interoperable system for managing global force structure and employment data, enabling the U.S. Army to make more data-driven, efficient force management decisions.
Portfolio Strength Boosts BBAI Shares
BigBear.ai’s shares have rallied 42.5% in the past year compared with the Zacks Computer & Technology sector’s growth of 38.7% and the Zacks Computers - IT Services industry’s rise of 30%.
BigBear.ai Holdings, Inc. Price and Consensus
BigBear.ai Holdings, Inc. price-consensus-chart | BigBear.ai Holdings, Inc. Quote
The uptick can be attributed to BBAI’s expanding product portfolio and its strong network of partners, which continue to drive its growth.
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 is well-positioned to capitalize on the increasing government investment in AI solutions. The growing interest from the government bolsters BigBear’s innovation pipeline and enables BBAI to adapt and extend its capabilities, allowing it to serve a larger and more diverse market.
Expanding Clientele Aids BBAI’s Prospects
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.
BBAI’s 2024 Outlook
BigBear.ai is emerging as one of the leaders 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 growth.
For fiscal 2024, BBAI expects total revenues between $165 million and $180 million.
The Zacks Consensus Estimate for revenues is pegged at $172.36 million, indicating year-over-year growth of 11.08%.
The consensus mark for fiscal 2024 earnings is pegged at a loss of 79 cents per share, unchanged in the past 30 days. The figure indicates a year-over-year decline of 97.5%.
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.
Bigbear.ai currently carries Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in accumulating the stock.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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