Will BigBear.ai's $384.9M Backlog Drive H2 Acceleration?

BigBear.ai Holdings, Inc.’s BBAI AI-based portfolio of offerings is at a juncture where the demand for national security and mission-critical needs meet. The increasing spending by the United States on travel, trade and border security has elevated the company's revenue visibility. Its diversified portfolio of AI-based solution providers has given it a competitive edge to secure large-scale, long-term government contracts, thus boosting its backlog growth. As of March 31, 2025, BBAI’s backlog grew 30% year over year to $384.9 million.

The company enjoys a competitive advantage across the market due to its commercial and software solutions like Pangiam Threat Detection, veriScan, Trueface, Pro Model AI, ConductorOS, and Shipyard.ai. Moreover, its continuous efforts on innovation to align its services directly with the market needs act as a catalyst. BigBear.ai’s recent agreement with the U.S. Department of Defense Joint Staff J35’s Orion Decision Support Platform validates its relevance in mission-critical AI solutions backed by the government’s increased spending toward national security.

Based on the tailwinds, BigBear.ai retained its 2025 outlook, with revenues expected between $160 million and $180 million, up 1.1-13.8% year over year. However, the ongoing market risks, increased operating expenses and potential delay threats are what the company needs to be wary of in the near and long-term.

Nonetheless, based on the favorable market fundamentals, the Zacks Consensus Estimate for revenues indicates growth acceleration for the second half of 2025. Revenue estimates for the third and fourth quarters are expected to witness 6.3% and 7.3% growth rates, respectively, with the average growth rate coming around 6.8%. Revenues grew 5% in the first quarter and we expect 3% growth in the second quarter. This means the average revenue growth for the first half of the year is expected to be around 4%. It can be deduced that, comparatively, the second half of 2025 is expected to reflect accelerated top-line growth.

Robust Contract Wins Aiding Other Market Players

Sharing the market space with BigBear.ai, other renowned players like C3.ai, Inc. AI and Booz Allen Hamilton Holding Corporation BAH are also in favorable waters of market demand, resulting in increased contract wins and backlog.

C3.ai is a California-based information technology company that specializes in enterprise Artificial Intelligence. Its consistent focus on innovations has positioned it well to increase its bookings position and expand strategic alliances. During its fourth quarter of fiscal 2025, C3.ai reported innovations in agentic AI with the renewal and expansion of the agreement with its long-standing partner, Baker Hughes. In the fourth quarter of fiscal 2025, partner-supported bookings grew 419% year over year, with the company closing 59 agreements through its partner network, including Microsoft, AWS, Google Cloud and McKinsey & Company, to name a few.

Booz Allen Hamilton is a Virginia-based company that specializes in intelligence, AI and digital transformation. Its robust consulting-led AI deployment across defense and homeland security missions position it well in the market to grab notable federal opportunities. As of fiscal 2025, Booz Allen Hamilton’s total backlog was $37.03 billion, up 15.3% year over year.

BBAI Stock’s Price Performance & Valuation Trend

Shares of this Virginia-based AI-powered decision intelligence solutions provider have trended upward 33.4% in the past three months, significantly outperforming the Zacks Computers - IT Services industry, the Zacks Computer and Technology sector and the S&P 500 index.

BBAI stock is currently trading at a discount compared with the industry peers, with a forward 12-month price-to-sales (P/S) ratio of 6.53X, as evidenced by the chart below. The discounted valuation of the stock, compared with its peers, advocates for an attractive entry point for investors. That said, in the long term, the valuation could move toward a premium, given the favorable market fundamentals backing the company’s revenue visibility.

EPS Trend of BBAI

BBAI’s earnings estimates for 2025 and 2026 have trended downward in the past 60 days to a loss per share of 41 cents and 21 cents, respectively. However, the estimated figures for 2025 and 2026 imply year-over-year growth of 62.7% and 49.2%, respectively.

Earnings Estimate Revision

BBAI stock currently carries a Zacks Rank #4 (Sell).

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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