Why BigBear.ai Stock Roared Ahead Today

Shares of BigBear.ai (BBAI 14.52%), which uses artificial intelligence (AI) to crunch large amounts of data for its customers, roared ahead nearly 13% in early trading Tuesday before retracing — all on no obvious news.

As of 11:25 a.m. ET, BigBear stock is still up 10.6%.

Introducing BigBear.ai

BigBear.ai bills itself as “a leading provider of mission-ready AI solutions and services for defense, national security, and critical infrastructure,” delivering “predictive analytics” to help users make decisions about complex datasets. Whether or not that’s true, the big question about BigBear is how long it can remain a “leader” at the rate it’s growing.

Or the rate it’s not growing.

Despite sporting a market capitalization well in excess of $2 billion, BigBear did less than $153 million in revenue over the past year…and lost nearly three times that amount: $444 million. It’s also hardly growing sales at all. Trailing revenue of $152.6 million is up less than 5% since 2021, putting the company’s sales growth rate at a meager 1%.

The only thing growing at this start-up is losses. Trailing-12-month losses are more than 3.5 times as bad as what the company lost in 2021, and analysts who follow BigBear stock see nothing but losses in its future, as far out as anyone is willing to make predictions.

Is BigBear.ai stock a buy?

Four days ago, BigBear did announce a new contract to provide data analytics for “Enhanced Passenger Processing” at the Nashville International Airport. The stock’s been generally rising since then, but in the absence of any mention of the revenue BigBear will get from this contract (much less any profit it might earn), I’m really not very optimistic about it.

To me, BigBear stock looks a lot more like a sell than a buy.