The Hot AI market has produced many high-flying AI strains. One of these is bigbear.ai(NYSE: BBAI).
The company’s stock price rose more than 200% until June 18th in the last 12 months. Stocks went high for 52 weeks in February after President Donald Trump announced. Project Stargateit aims to invest billions of dollars in the AI sector.
Since then, BigBear.AI strains have fallen by more than 50% from their peak. Does this offer the opportunity to scoop the company’s stock at a low price?
Image source: Getty Images.
Due to the confluence of factors, BigBear.AI stocks have declined this year. One is Wall Street’s concerns about the unpredictable macroeconomic environment that has been exacerbated by the Trump administration Tariff Approach.
Plus, the federal government is cutting its budget. This is a concern as Bigbear.ai offers AI solutions centered around national security and infrastructure. As a result, the majority of corporate revenue comes from federal government contracts.
In addition to this mix, bigbear.ai revealed significant weaknesses in internal controls for financial reporting, contributing to the company’s stock price decline. As a result, the company has revised its financial statements for the past few years. Unrelatedly, CFO Julie Peffer left in June.
This was not the only leadership change in 2025. In January, Bigbear.ai acquired new CEO Kevin McAleienan. Kevin Mcaleenan served as secretary to the US Department of Homeland Security during President Trump’s first term.
Changes in Bigbear.ai’s leadership may be a good result in the long run. McAleanan’s experience with the previous Trump administration could help bigbear.ai survive government budget cuts.
Additionally, under the previous CEO, the company achieved sales of at least $165 million, earning it for $158.2 million last year, due to its failure to meet its 2024 target. Once McAleienan takes over, Bigbear.ai will likely be able to meet its full-year revenue target for 2025. He must succeed in earning shareholder trust in his leadership.
He only has the first quarter under his belt, so it’s too early to tell if McAleinan can deliver. Bigbear.ai generated $34.8 million in first quarter sales, up 5% year-on-year.
However, the company’s balance sheet contains a significant chunk of debt. Of the total liability of $108.5 million for the first quarter, $101.4 million was liability. Total assets for the first quarter were 396.3 million, of which $107.6 million was cash equivalent.
Moreover, despite sales growth year-over-year, bigbear.ai is not profitable. The first quarter ended with a net loss of $62 million.
It’s not uncommon for tech companies to be at a loss, but in these cases they want sales to grow rapidly. With revenues rising 5% year-on-year for the first quarter, BigBear.AI has not achieved strong growth, particularly in the hot sector of artificial intelligence. This raises questions about the company’s ability to capture customers and ultimately fails to achieve profitability.
Bigbear.ai stock valuation is another factor to consider. The price to sale (P/S) ratio serves this purpose. This is to measure whether an investor is willing to pay per return.
This metric is commonly used in non-profitable companies. Compare it with an artificial intelligence leader nvidiasimilarly c3.aicompetitors who also operate in the government AI sector will help you understand bigbear.ai’s stock valuation.
The chart shows that bigbear.ai’s P/s multiple is the lowest of the three AI companies, a significant drop since its February location. This suggests that the bigbear.ai strain is being evaluated attractively.
However, NVIDIA and C3.AI guarantee a higher rating for business performance. For example, C3.AI revenue for the first quarter ended April 27th increased to $44.1 billion from C3.AI revenue ended April 30th to $44.1 billion.
Bigbear.ai’s mediocre AI revenue growth, debt, and factors that have led to stock prices this year are at risk, meaning investments in the company are at risk. As a result, it’s best to keep your purchase down. Instead, look at business performance over the next few quarters to see if you can boost your sales before reconsidering BigBear.AI stocks.
Consider this before purchasing stocks at bigbear.ai.
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Robert Izquield C3.AI and NVIDIA have positions. Motley Fool has a job at Nvidia and recommends. Motley’s Fool recommends c3.ai. To Motley’s fool Disclosure Policy.
