Cash Doubles, Losses Widen: Is BigBear.ai Stock Still Worth the Risk?

BigBear.ai Holdings BBAI is navigating a mixed financial picture in early 2025, leaving investors to weigh short-term margin pressure against longer-term strategic flexibility. In its first-quarter 2025 report, the company posted a wider adjusted EBITDA loss of $7 million compared with a $1.6 million loss a year ago. The drag was largely driven by increased R&D investment and procurement delays tied to federal funding cycles—factors management believes are temporary.

On the other hand, BigBear.ai has significantly strengthened its balance sheet. Cash and equivalents rose to $108 million, more than doubling from $50 million at year-end 2024. This boost was largely due to $58 million in debt reduction from note conversions, positioning the company with greater flexibility to invest and weather volatility.

While profitability remains elusive, BigBear.ai’s growing $385 million backlog, up 30% year over year, signals demand for its national security and critical infrastructure AI solutions. Wins like the DoD’s Joint Staff J35 Orion platform and expanded airport deployments reinforce the company’s operational momentum.

Management is betting on long-term value creation through innovation, partnerships, and high-impact contracts. The cash cushion gives them time but not unlimited room for missteps.

Palantir and C3.ai: How Competitors Are Managing the Same Trade-Off

BigBear.ai’s struggle between rising cash reserves and widening EBITDA losses mirrors challenges faced by its peers, Palantir Technologies PLTR and C3.ai AI. Palantir, while profitable on an adjusted basis, has consistently prioritized long-term government contracts over near-term margin maximization. Palantir’s investments in AI R&D and defense partnerships show that it is willing to absorb short-term volatility for future growth—a strategy BigBear.ai is now emulating.

C3.ai is in a similar position. Like BigBear.ai, C3.ai has been posting operating losses while pouring capital into AI platform enhancements and go-to-market expansion. C3.ai’s focus on enterprise and defense verticals overlaps heavily with BigBear.ai’s roadmap, especially in predictive analytics and mission-focused AI.

Both Palantir and C3.ai reflect the reality that EBITDA pressure is often the cost of staying competitive in a high-growth AI market. For BigBear.ai, the key will be using its stronger cash position to match its rivals’ pace without burning through it too quickly.

BBAI Stock’s Price Performance & Valuation Trend

Shares of this Virginia-based AI-powered decision intelligence solutions provider have surged 101.3% in the past month, significantly outperforming the Zacks Computers - IT Services industry, the Zacks Computer and Technology sector and the S&P 500 index, as you can see below.

BBAI Share Price Performance

BBAI stock is currently trading at a discount compared to its industry peers, with a forward 12-month price-to-sales (P/S) ratio of 10.54, as evidenced by the chart below.

Earnings Estimate Trend of BBAI Stock

BBAI’s bottom-line estimates for 2025 have remained unchanged at a loss of 41 cents, while trending a little downward for 2026 to 21 cents per share, in the past 60 days. However, the estimated figure for 2025 implies a year-over-year improvement from a loss of $1.10 per share a year ago.

BBAI’s Earnings Estimate Revision

BBAI stock currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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