AI Consensus Investment Thesis
BigBear.ai (BBAI) Stock Forecast and AI Rating
Forecast targets and rating
Final recommendation
PARTIAL SELL
Calculated from the frozen synthesized path using the same return, horizon, volatility and dividend rules as individual opinions.
1-Year
SELL ALL$2.40
-14.1%5-Year
PARTIAL SELL$1.95
-30.2%Latest flagship insight
Defense Software Multiple Deflates as Relentless Dilution Erases Topline Gains
There is sharp divergence between headline AI turnaround narratives and underlying equity mechanics. While consensus acknowledges balance sheet solvency via $409.8 million in cash, persistent negative free cash flow and continuous share dilution structurally compress elevated sales multiples toward defense services reality.
This is the latest published deep-analysis batch. Audit published forecasts in full transparency
Superintelligence (Anthropologist), Warren Buffett (Value Purist), Universal Investor (Polymath), Michael Burry (Vulture), Elon Musk (Visionary), Sherlock Holmes (Whistleblower), Ray Dalio (Strategist), J.P. Morgan (Titan), Machiavelli (Insider). Some archetypes run in multiple modes, resulting in 14 advisors total.
Gemini
Claude
ChatGPTExecutive Summary
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If you invested $10,000 in BigBear.ai at the forecast anchor (2026-09-18): $6,977 in five years versus $13,892 for S&P 500 benchmark.
20-quarter synthesized forecastPrice targets, quarterly returns and the reasoning behind each stepView tableClose table
Frozen forecast from 18 Sept 2026. Prices in USD; returns exclude dividends. Each quarter is compounded from the previous quarter.
Swipe the table horizontally to read every column.
| Quarter | Target (USD) | Quarter return | Total return | Forecast rationale |
|---|---|---|---|---|
| Q4 2026 | 2.62 | -6.26% | -6.26% | Monetary tightening and discount rate scrutiny deflate speculative multiples. Investors digest persistent cash burn and the 100-million-share shelf overhang, discounting headline contract announcements despite baseline defense procurement stability. |
| Q1 2027 | 2.49 | -4.97% | -10.92% | Full-year 2026 reporting confirms top-line stabilization driven by Ask Sage consolidation, but operating losses remain near $90 million. Substantial share dilution tempers enthusiasm, triggering multiple contraction toward defense contractor peers. |
| Q2 2027 | 2.50 | +0.38% | -10.58% | Incremental airport biometric deployments and task-order wins under federal vehicles provide modest commercial validation. A localized relief rally lifts sentiment, though gains are capped by high overhead and ongoing share issuance. |
| Q3 2027 | 2.40 | -3.96% | -14.12% | Federal fiscal year-end budget debates cause contract authorization slippage. Heavy engineering overhead and selling expenses absorb gross margin gains, prompting fundamental institutional investors to de-risk holdings across unprofitable small-cap defense technology. |
| Q4 2027 | 2.31 | -3.92% | -17.49% | Management taps the active at-the-market equity shelf to finance working capital needs. Year-end tax-loss harvesting and expanding share float overwhelm retail buying interest, driving quoted equity prices lower. |
| Q1 2028 | 2.26 | -2.15% | -19.26% | Audited 2027 results reveal sluggish organic software growth beneath acquired lines, while free cash flow remains negative. Valuation multiples contract as analysts reject pure SaaS multiples in favor of services-heavy benchmarks. |
| Q2 2028 | 2.21 | -2.26% | -21.09% | Classified software installations expand across joint commands, lifting high-margin licensing. Modest sequential gross profit expansion establishes a transient valuation floor, temporarily halting downward momentum across public trading venues. |
| Q3 2028 | 2.18 | -1.25% | -22.07% | Election-cycle budgetary gridlock delays defense appropriations, slowing backlog conversion across national security accounts. Competitive pressure from defense primes squeezes subcontractor margins, reigniting downward drift across the equity base. |
| Q4 2028 | 2.08 | -4.47% | -25.56% | Post-election appropriations unlock delayed task orders, generating a seasonal sentiment lift. However, cumulative share count expansion continues to dilute per-share asset backing, muting overall price recovery into year-end. |
| Q1 2029 | 2.09 | +0.08% | -25.50% | Full-year 2028 disclosures demonstrate top-line growth toward $180 million, but persistent SG&A bloat prevents GAAP operating profitability. Market participants systematically align valuation multiples with low-margin government IT consulting peers. |
| Q2 2029 | 2.11 | +0.94% | -24.80% | Commercial vision deployments across international transport gateways demonstrate cross-selling execution outside federal agencies. Incremental software licensing revenue supports a brief valuation rebound, encouraging specialized technology value allocators. |
| Q3 2029 | 2.08 | -1.15% | -25.66% | Defense budget reprioritization slows non-priority software allocations. Revenue lumpiness resurfaces as contract renewals face extended administrative scrutiny, triggering algorithmic selling as forward growth assumptions are trimmed. |
| Q4 2029 | 2.02 | -2.92% | -27.83% | Restructuring initiatives modestly contain administrative overhead, but ongoing stock-based compensation expands the share float. The market prices the firm strictly as a specialized hybrid defense integrator, capping upside momentum. |
| Q1 2030 | 2.02 | -0.01% | -27.84% | Fiscal 2029 reporting indicates operating cash flow approaching neutral thresholds as Ask Sage reaches critical deployment scale. Relieved solvency fears provide fundamental price support near tangible asset value. |
| Q2 2030 | 2.01 | -0.34% | -28.08% | Remaining ATM shelf capacity is exercised to fund autonomous edge intelligence upgrades. The influx of newly registered common shares dilutes per-share economics, offsetting positive operational news releases. |
| Q3 2030 | 2.00 | -0.71% | -28.60% | Sustained biometric border maintenance billings deliver predictable baseline cash generation. Stable federal procurement cushions operations, establishing an orderly trading range supported by remaining balance sheet cash reserves. |
| Q4 2030 | 1.96 | -1.84% | -29.91% | Macroeconomic stabilization and steady defense IT spending cap downside volatility, though lack of proprietary foundational model scale prevents multiple expansion. Trading volume subsides into seasonal portfolio rebalancing. |
| Q1 2031 | 1.96 | -0.16% | -30.02% | Full-year 2030 statements confirm revenue crossing $220 million with slender operating margins. Growth funds exit toward higher-margin enterprise software platforms, leaving the equity anchored to low single-digit multiples. |
| Q2 2031 | 1.96 | +0.26% | -29.84% | Predictable software maintenance renewals and cost-containment measures support modest operational stability. The enterprise generates sufficient cash to self-fund maintenance, removing distressed discounts while per-share progress remains subdued. |
| Q3 2031 | 1.95 | -0.56% | -30.23% | The five-year forecast horizon concludes with equity valuation fully synchronized to normalized defense contractor economics. Top-line expansion is counterbalanced by historical dilution, leaving shares grounded at intrinsic replacement value. |
The fundamental tension centers on a decoupling between enterprise progress and per-share equity value. Management successfully mitigated insolvency risks by converting $124.6 million of convertible debtconvertible debtDebt instruments convertible into equity, impacting balance sheet risk and potential shareholder dilution.View full glossary entry and accumulating $409.8 million in cash. However, this balance-sheet fortress was funded by expanding the share count to 479.5 million, with an open 100-million-share shelf creating persistent supply overhang. Operationally, Q2 2026 revenue rebound to $36.7 million and gross margin expansiongross margin expansionAn increase in gross profit as a percentage of revenue.View full glossary entry to 32.8% reflect acquired Ask Sage software, while organic revenue fell 6%. With trailing free cash flowfree cash flowFree cash flow (FCF) is cash generated after operating expenses and capital expenditures that remains available for debt reduction, reinvestment, or shareholder returns.View full glossary entry at negative $73.8 million, the company operates as a human-capital-intensive defense integrator rather than a scalable platform. Valuation at over 10x trailing sales must contract toward defense-IT norms of 2.5x to 3.5x.
Key insights
- DilutiondilutionReduction in ownership percentage for existing shareholders caused by the issuance of new equity shares.View full glossary entry decouples growth: enterprise revenue can compound at mid-teens rates while per-share revenue stagnates under ongoing secondary issuance and incentive compensation.
- Gross margin expansiongross margin expansionAn increase in gross profit as a percentage of revenue.View full glossary entry from acquired software wrappers is systematically absorbed by elevated engineering overhead, integration costs, and compliance expenses, postponing GAAP profitabilitygaap profitabilityGAAP profitability refers to earnings that remain positive under generally accepted accounting principles, including standard operating and noncash expense recognition.View full glossary entry.
- Classified facility accreditations and homeland security incumbency establish a resilient revenue floor, but defense primedefense primeA lead contractor that manages and integrates major defense programs for a government customer.View full glossary entry gatekeepers capture lead contractor rents.
The company appears to be turning around because it has over $400 million in cash and no immediate bankruptcy risk. However, it achieved this safety by creating hundreds of millions of new shares, which permanently reduces each share's slice of future profits. While sales grew recently due to an acquired software business, the core company still loses money and burns cash delivering customized government IT projects. As investors demand real profits, the stock's expensive artificial-intelligence valuation will likely shrink toward normal defense contractor levels.
Key insights
- Creating massive amounts of new stock means overall sales growth fails to boost individual share value.
- High costs for cleared engineers and administrative overhead consume almost all profits generated from contract wins.
- Steady government defense work prevents business failure but cannot justify an expensive software-like stock price.
Deep Dive
The retail market and speculative momentum traders view the company as an undervalued pure-play defense artificial intelligenceartificial intelligenceComputer systems designed to perform tasks that ordinarily require human perception, reasoning, learning, language, or decision-making.View full glossary entry disruptor positioned to emulate Palantir. This public narrative anchors heavily on headline sovereign defense spending, recent airport biometric wins, and the optical elimination of convertible debtconvertible debtDebt instruments convertible into equity, impacting balance sheet risk and potential shareholder dilution.View full glossary entry. The crowd mistakenly treats acquired consulting billings as scalable software subscriptions, while overlooking chronic negative free cash flownegative free cash flowA condition where cash outflows for operations and investment exceed cash generated in the period.View full glossary entry and severe per-share share count expansion.
Paywalled preview begins: Deep Dive: detailed analysis
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Deep Dive
Alpha Gap & Repricing Catalysts
Where does the current market narrative diverge from our AI Opinions—and what could close the gap?
Market Narrative
What does the market currently expect? The retail market and speculative momentum traders view the company as an undervalued pure-play defense artificial intelligenceartificial intelligenceComputer systems designed to perform tasks that ordinarily require human perception, reasoning, learning, language, or decision-making.View full glossary entry disruptor positioned to emulate Palantir. This public narrative anchors heavily on headline sovereign defense spending, recent airport biometric wins, and the optical elimination of convertible debtconvertible debtDebt instruments convertible into equity, impacting balance sheet risk and potential shareholder dilution.View full glossary entry. The crowd mistakenly treats acquired consulting billings as scalable software subscriptions, while overlooking chronic negative free cash flownegative free cash flowA condition where cash outflows for operations and investment exceed cash generated in the period.View full glossary entry and severe per-share share count expansion.
Alpha Gap
What is the biggest difference between market expectations and our AI forecasts? The crowd materially overestimates intrinsic equity value, creating marked overpricing. The market's central blind spot is confusing balance-sheet restructuring with commercial software dominion. Extinguishing debt eliminated default risk but flooded the floatfloatThe number of shares available for public trading in the market.View full glossary entry with 479.5 million shares, causing revenue per share to collapse by over 70%. Furthermore, Q2 2026 top-line growth was entirely inorganic, concealing a 6% organic contraction. Trading at over 10x sales for a negative-cash-flow government integrator ensures severe multiple compressionmultiple compressionA decline in valuation ratios such as price-to-earnings or enterprise-value-to-sales.View full glossary entry toward realistic contractor benchmarks.
Repricing Catalyst
What could make the market recognize and close that gap? Successive audited financial releases across 2027 will shatter software turnaround assumptions when organic revenue growth stalls and quarterly cash burncash burnThe rate at which a company consumes its cash reserves to fund operations before achieving profitability.View full glossary entry persists above $15 million. Repricing will accelerate when management actively draws down its 100-million-share shelf facility to fund operating deficits. The tangible dilutiondilutionReduction in ownership percentage for existing shareholders caused by the issuance of new equity shares.View full glossary entry and inability to show operating leverageoperating leverageThe sensitivity of operating profit to changes in revenue caused by the mix of fixed and variable costs.View full glossary entry will force institutional models to rebase valuations from speculative software multiplessoftware multiplesValuation ratios applied to software businesses, commonly based on revenue, recurring revenue, earnings, or cash flow.View full glossary entry toward standard defense services multiples.
Sentiment and Timing
What do sentiment, volatility, and the market-recognition cycle suggest about the thesis timing?
- Greed / Fear
- Fear
- Volatility
- High Erratic
- Cycle position
- Reversal
Sentiment assessments agree that speculative AI euphoria is reversing as discount rates expose chronic cash burncash burnThe rate at which a company consumes its cash reserves to fund operations before achieving profitability.View full glossary entry. The primary tension lies between contrarians expecting imminent short-squeeze stabilization and fundamental bears projecting relentless multiple deflation driven by continuous secondary equity dilutionequity dilutionThe reduction in ownership percentage for existing shareholders caused by the issuance of new shares.View full glossary entry.
Macro Regime Fit
Does the current market environment support the thesis? The prevailing macro backdrop of Federal Reserve policy rates near 4.00% and benchmark Treasury yields near 5.00% creates a severe valuation headwind. High discount rates penalize unprofitable duration assets trading at double-digit price-to-sales ratios. Although expanding national security budgets provide a resilient procurement floor, elevated capital costs and persistent cleared-labor inflation aggressively compress speculative small-cap valuation multiples.
Advisor Disagreement
What do our AI Advisors disagree about most? The decisive disagreement centers on whether the Ask Sage and Pangiam acquisitions represent a structural pivot toward high-margin software or an optical illusion masking sub-scale consulting economics. Bullish perspectives argue that accredited classified enclaves create insurmountable regulatory moats that will drive gross marginsgross marginsThe percentage of revenue remaining after deducting the direct costs of producing goods sold.View full glossary entry past 40% and unlock rapid cash break-even. In contrast, bearish and disciplined consensus analyses emphasize that organic revenue contracted 6% in Q2 2026, while ongoing cash burncash burnThe rate at which a company consumes its cash reserves to fund operations before achieving profitability.View full glossary entry of $73.8 million necessitates continuous share printing under the 100-million shelf. This debate will resolve when fiscal 2027 audited statements demonstrate whether organic software revenue can scale without accelerating administrative overhead.
Base-Case Forces
Event Risk ScoreVery High94/100Near-certain positive forces
Top Drivers / Tailwinds
Near-certain forces that support the investment thesis. These forces are treated as part of the base case (more than 60% probability of occurrence). Impact columns are specific to this asset class.
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| Driver / Tailwind | Category | Est. stock-price impact | Est. earnings impact | Why it matters |
|---|---|---|---|---|
| Federal defense AI procurement expansion | Sector And Industry | +22% | +34% | Geopolitical fragmentationgeopolitical fragmentationStructural shifts in global trade and policy impacting international business operations and market access.View full glossary entry and Pentagon modernization initiatives drive sustained appropriations toward tactical decision support and autonomous command architectures. Active prime vehicles including Army GFIM-OE and Navy SeaPort-NxG secure baseline defense revenue. This non-discretionary federal spending stream protects core operations from commercial software churn, providing visible contract backlogbacklogThe total value of signed contracts yet to be fulfilled, representing future revenue visibility.View full glossary entry expansion across the five-year forecast horizon. |
| Ask Sage sovereign AIsovereign aiA national strategy to develop or control domestic AI models, data, computing capacity, skills, and governance.View full glossary entry software mix | Innovation And Product | +18% | +32% | Integrating Ask Sage introduces FedRAMP-accredited generative software capable of operating within classified, air-gapped defense enclaves. Delivering software licenses rather than pass-through integration hours expands gross marginsgross marginsThe percentage of revenue remaining after deducting the direct costs of producing goods sold.View full glossary entry from historic mid-20% ranges toward 33-35%. This transition improves contract unit economicsunit economicsRevenue, variable cost, contribution profit, and acquisition or retention economics measured for one customer, product, transaction, or operating unit.View full glossary entry and establishes high switching costsswitching costsFinancial, operational, technical, contractual, or learning costs incurred when changing products or providers.View full glossary entry, shielding recurring government software billings from civilian competition. |
| Homeland border biometric screening rollout | Competitive Positioning | +15% | +22% | Mandates across Customs and Border Protection accelerate the deployment of Pangiam computer-vision screening at major transit hubs. Operational installations across international gateways provide recurring subscription and maintenance revenues. This commercial identity verification footprint diversifies billings away from purely military appropriations, strengthening gross marginsgross marginsThe percentage of revenue remaining after deducting the direct costs of producing goods sold.View full glossary entry and improving visibility through multi-year institutional screening renewals. |
| Balance sheetbalance sheetA financial statement showing assets, liabilities, and equity at a specific point in time.View full glossary entry recapitalization liquidity runway | Capital Allocation | +12% | +14% | Converting senior notes eliminated over $124 million in debt, leaving funded obligations under $18 million alongside $409.8 million in cash. This balance-sheet transformation removes near-term insolvency risks, eliminating debt-distress discounting. The liquidity buffer grants management roughly four years of operational runway to execute product integration without seeking punitive high-yield debt financing. |
Near-certain negative forces
Top Frictions / Headwinds
Near-certain forces that could slow, cap, or damage the thesis. These forces are treated as part of the base case (more than 60% probability of occurrence). Impact columns are specific to this asset class.
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| Friction / Headwind | Category | Est. stock-price impact | Est. earnings impact | Why it matters |
|---|---|---|---|---|
| Persistent share dilution from shelf | Capital Allocation | -35% | -10% | Aggressive equity issuance expanded common shares from under 150 million to 479.5 million, while an active 100-million-share shelf creates permanent supply overhang. Using equity to fund operating deficits systematically reduces revenue per share and book valuebook valueThe net asset value of a company calculated as total assets minus total liabilities.View full glossary entry. This persistent supply dilutes residual shareholder claims, placing an impenetrable ceiling on equity appreciation despite nominal sales gains. |
| Extreme valuation multiplevaluation multipleA ratio comparing market or enterprise value with a financial measure such as earnings, revenue, book value, or cash flow.View full glossary entry deflationary compression | Macroeconomic And Macrofinancial | -32% | -5.0% | Trading at over 10x sales while generating negative $73.8 million in free cash flowfree cash flowFree cash flow (FCF) is cash generated after operating expenses and capital expenditures that remains available for debt reduction, reinvestment, or shareholder returns.View full glossary entry leaves the stock precariously overvalued against defense IT peers trading below 2x sales. Elevated interest rates near 4.00% penalize unhedged, negative-cash-flow duration. As speculative hype normalizes, relentless multiple compressionmultiple compressionA decline in valuation ratios such as price-to-earnings or enterprise-value-to-sales.View full glossary entry toward government contractor benchmarks exerts severe gravitational drag on share prices. |
| Structural operating cash burncash burnThe rate at which a company consumes its cash reserves to fund operations before achieving profitability.View full glossary entry persistence | Operational Efficiency | -26% | -35% | Despite software marketing, operations remain heavily dependent on expensive cleared engineering labor, with cost of revenues absorbing roughly 67% of gross billings. Operating expenses exceed gross profit by threefold, while TTM operating losses stand at $95.9 million. Without proprietary platform scalability, corporate overhead continually consumes gross profits, delaying GAAP operating self-sufficiency beyond the forecast horizon. |
| Subcontractor subordination to defense primesdefense primesLarge lead contractors responsible for integrating and delivering major defense systems or programs.View full glossary entry | Competitive Positioning | -18% | -24% | Entrenched defense conglomerates and well-capitalized software competitors like Palantir dominate flagship command-and-control programs. Lacking sovereign scale and massive lobbying apparatuses, the company is frequently relegated to lower-margin subcontractor roles. This subordinate position restricts pricing powerpricing powerThe ability of a company to raise prices without losing significant customer demand.View full glossary entry on contract recompetes, subjects deliveries to prime-contractor margin squeezes, and constricts long-term pipeline conversion. |
What Could Break or Accelerate the Thesis
Plausible downside scenarios
Tail Risks
Tail yet plausible downside scenarios selected for their highest potential impact.
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| Tail scenario | Chance of Occurring | Stock Price Impact | Why plausible / what changes |
|---|---|---|---|
| Catastrophic goodwill impairmentgoodwill impairmentAccounting charge taken when the value of an acquired asset drops below its recorded book value.View full glossary entry and restructuring | 32% | -55% | Deteriorating financial returns from Pangiam and Ask Sage acquisitions force auditors to mandate massive impairment write-downs against more than $500 million in capitalized intangibles by 2028. Triggered by persistent operating losses and slowing seat expansion, this forensic purge would eviscerate reported common equity, shatter fundamental credibility, and force distressed dilutive recapitalizations at penny-stock valuations. |
| Flagship federal contract cancellation or defunding | 28% | -50% | The Department of the Army or a major intelligence customer cancels or deobligates core task orders under the GFIM-OE framework following federal austerity reviews. Triggered by government efficiency initiatives by late 2027, losing this sole-source anchor vehicle would erase over 25% of forward revenue visibilityrevenue visibilityHow clearly future revenue can be estimated from contracts, subscriptions, or recurring demand patterns.View full glossary entry, causing unabsorbed engineering overhead to accelerate cash burncash burnThe rate at which a company consumes its cash reserves to fund operations before achieving profitability.View full glossary entry toward distress levels. |
Plausible upside scenarios
Tail Opportunities
Tail yet plausible upside scenarios selected for their highest potential impact.
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| Tail scenario | Chance of Occurring | Stock Price Impact | Why plausible / what changes |
|---|---|---|---|
| Landmark TSA enterprise biometric prime award | 24% | +85% | The Transportation Security Administration awards the company an exclusive multi-year prime contract exceeding $750 million to modernize domestic aviation checkpoint screening. Triggered by federal statutory travel automation mandates by 2028, this award leverages Pangiam's accredited algorithms. The win would triple annual revenues, convert structural cash burncash burnThe rate at which a company consumes its cash reserves to fund operations before achieving profitability.View full glossary entry into positive operating leverageoperating leverageThe sensitivity of operating profit to changes in revenue caused by the mix of fixed and variable costs.View full glossary entry, and prompt an institutional re-rating toward defense infrastructure multiples. |
| Strategic buyout by defense conglomerate | 22% | +60% | A tier-one aerospace and defense primedefense primeA lead contractor that manages and integrates major defense programs for a government customer.View full glossary entry launches a full acquisition tender at a substantial control premium to capture accredited CMMC Level 2 enclaves and Ask Sage generative workflows. Triggered by an urgent mandate to internalize classified edge AIedge aiArtificial intelligence processing performed locally on devices rather than in centralized cloud data centers.View full glossary entry by late 2028, this transaction eliminates standalone cash-burn risks and crystallizes instant value above cash reserves. |
Company Financial Analysis
BigBear.ai Earnings and Financials Analysis by AI
Financial figures available as of Sep 20, 2026. Only filings and source records available by this analysis date are included.
Earnings and financials
AI Review
The latest results show a business working hard to stabilize after severe contract cutbacks. After revenue dropped over 19% in 2025 to $128 million due to expiring Army contracts, second-quarter 2026 revenue rose 13% to $36.7 million. However, this recovery was largely purchased rather than built, coming almost entirely from newly acquired Ask Sage software. Excluding acquisitions, underlying legacy sales actually contracted. Beneath the stabilized sales headlines, true earnings remain deeply negative. The company lost $28.6 million from operations in the second quarter, while burning nearly $74 million in free cash flow over the trailing twelve months. High spending on administrative overhead and integration continues to swallow gross profits, leaving positive cash generation distant.
Revenue, earnings, and cash flow
The table compares up to five fiscal years of revenue, net income, and free cash flow available to this analysis.
| Fiscal year | Revenue | Net income | Free cash flow |
|---|---|---|---|
| 2025 | USD 127.7M | USD -293.9M | USD -46.3M |
| 2024 | USD 158.2M | USD -295.5M | USD -49.2M |
| 2023 | USD 155.2M | USD -70.7M | USD -22.1M |
| 2022 | USD 155M | USD -111.4M | USD -49.7M |
| 2021 | USD 145.6M | USD -123.6M | USD -20.4M |
Valuation context: historical P/E
The table compares up to five fiscal years of point-in-time valuation evidence available to this analysis.
| Fiscal year | P/E | Earnings basis | Currency basis | Ticker / reporting |
|---|---|---|---|---|
| 2025 | -- | TTM | Loss-making | USD / USD |
| 2024 | -- | TTM | Loss-making | USD / USD |
| 2023 | -- | TTM | Loss-making | USD / USD |
| 2022 | -- | Annual | Loss-making | USD / USD |
| 2021 | -- | Annual | Loss-making | USD / USD |
P/E uses historical market capitalization and earnings known at each period. Cross-currency observations are normalized to USD using point-in-time FX rates.
Profitability and margins
AI Review
Profit margins tell two completely different stories depending on which line you examine. Gross margin improved nicely to 32.8% in the second quarter of 2026, rising from 25% a year earlier. This improvement reflects the arrival of higher-margin Ask Sage software licenses, which generate better profit per dollar than older, labor-heavy government staffing contracts. Unfortunately, operating margins remain deep in the red at negative 77% for the quarter. Running a defense company requires substantial administrative, security clearance, and sales expenses that completely wipe out gross profit. Until high-margin software sales grow large enough to absorb fixed corporate overhead, overall profit margins will remain severely depressed.
The table compares up to five fiscal years of operating income and reported profitability margins.
| Fiscal year | Operating income | Operating margin | Net margin |
|---|---|---|---|
| 2025 | USD -83.4M | -65.3% | -230.2% |
| 2024 | USD -133.4M | -84.3% | -186.8% |
| 2023 | USD -39M | -25.2% | -45.5% |
| 2022 | USD -110.5M | -71.3% | -71.8% |
| 2021 | USD -78.5M | -53.9% | -84.9% |
Balance sheet and leverage
AI Review
The balance sheet looks remarkably healthy on the surface following a major debt restructuring in early 2026. Management eliminated over $124 million of convertible debt by turning it into common stock, leaving funded debt at under $18 million. By selling additional shares, the company accumulated roughly $410 million in cash and investments, providing about four years of operating safety. However, this newfound safety came at a high price for existing shareholders. Converting debt and issuing stock quadrupled the share count to nearly 480 million shares, permanently diluting ownership. Furthermore, more than half of the company's reported assets consist of vulnerable goodwill from acquisitions, which could face future accounting write-downs if software growth slows.
The table compares up to five fiscal years of debt, liquidity, net cash or debt, and current-ratio evidence.
| Fiscal year | Total debt | Cash + short-term investments | Net cash / (debt) | Current ratio |
|---|---|---|---|---|
| 2025 | USD 24.3M | USD 87.1M | USD 62.8M net cash | 1.78x |
| 2024 | USD 146.4M | USD 50.1M | USD 96.3M net debt | 0.46x |
| 2023 | USD 200.6M | USD 32.6M | USD 168M net debt | 0.93x |
| 2022 | USD 200.3M | USD 12.6M | USD 187.6M net debt | 1.52x |
| 2021 | USD 194.6M | USD 68.9M | USD 125.7M net debt | 2.94x |
Net debt below zero is displayed as net cash. Current ratio is current assets divided by current liabilities.
Capex and investment intensity
AI Review
Management spends very little money on physical buildings or equipment, keeping traditional capital expenditures near 3% of revenue. Instead, the company channels its investment dollars into buying outside businesses and funding software research. The pivotal move was spending over $250 million to acquire Ask Sage, attempting to buy classified software capabilities that would otherwise take years to develop. While buying pre-certified software helps avoid government certification delays, it introduces heavy integration burdens and non-cash amortization expenses. Spending on internal research and development has climbed above $7 million per quarter. These investments commit substantial liquid cash to software development without guaranteeing that future contract revenues will cover the costs.
The table compares up to five fiscal years of capital expenditure and research-and-development investment.
| Fiscal year | Capital expenditure | R&D spend |
|---|---|---|
| 2025 | USD 4.4M | USD 16.8M |
| 2024 | USD 11.1M | USD 10.9M |
| 2023 | USD 3.8M | USD 5M |
| 2022 | USD 769K | USD 8.4M |
| 2021 | USD 645K | USD 6M |
Quarterly Forecast Scenarios
BigBear.ai Averaged Consensus Scenarios
One row per forecast quarter. Asset scenario targets are shown in USD; benchmark values are shown in USD.
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| Quarter | Bear case (USD) | Base case (USD) | Bull case (USD) | S&P 500 benchmark (USD) |
|---|---|---|---|---|
| $2.464 | $2.644 | $2.912 | $750.26 | |
| $2.0944 | $2.507 | $3.0867 | $736.44 | |
| $1.9956 | $2.5334 | $3.3337 | $743.40 | |
| $1.796 | $2.4529 | $3.5003 | $755.15 | |
| $1.5985 | $2.3395 | $3.6054 | $776.22 | |
| $1.4067 | $2.2989 | $3.8577 | $787.13 | |
| $1.5192 | $2.2889 | $4.0892 | $802.83 | |
| $1.3217 | $2.237 | $4.2528 | $812.05 | |
| $1.216 | $2.165 | $4.3378 | $839.18 | |
| $1.1065 | $2.1641 | $4.5547 | $850.50 | |
| $1.1618 | $2.1872 | $4.7369 | $872.39 | |
| $1.0805 | $2.1683 | $4.8316 | $885.51 | |
| $0.994076 | $2.1103 | $4.9766 | $909.56 | |
| $0.924491 | $2.1176 | $5.2254 | $916.13 | |
| $0.97996 | $2.1233 | $5.3299 | $936.51 | |
| $0.930962 | $2.0924 | $5.2766 | $947.34 | |
| $0.893724 | $2.0705 | $5.4349 | $969.59 | |
| $0.866912 | $2.0725 | $5.6523 | $979.99 | |
| $0.864583 | $2.0796 | $5.7654 | $999.60 | |
| $0.821354 | $2.072 | $5.8807 | $1,012 |
Behind the synthesis
How each opinion shapes the consensus
The independently supported consensus pattern establishes that the enterprise successfully neutralized near-term bankruptcy risk by converting $124.6 million of convertible notes and accumulating $409.8 million in cash. However, this balance-sheet rehabilitation was purchased via aggressive equity dilution that expanded common shares to 479.5 million, with an active shelf facility threatening further supply. Operationally, Q2 2026 revenue rebound to $36.7 million and gross margin expansion to 32.8% were inorganic, driven by the Ask Sage consolidation, while legacy sales contracted 6% and trailing free cash flow burned negative $73.8 million. The strongest contrarian case posits that political leadership and sovereign AI accreditations will ignite pure software operating leverage; this claim collapses under scrutiny because high-touch defense integration and swelling administrative overhead consume gross profits. Relative weights heavily favor rigorous filings-based analyses documenting unit-of-account per-share dilution, while heavily downweighting unevidenced hypergrowth or premature insolvency claims.
Universal Investor AI
The Polymath
GPT-6 AstraExceptional evidentiary rigor supported by SEC filings and DoD comptroller releases. It isolates that legacy revenue contracted 6% once excluding Ask Sage, demonstrates that interest rate hikes compound duration penalties on 10.2x sales, and articulates why cash protects solvency without validating an inflated enterprise multiple.
Universal Investor AI
The Polymath
Opus 5Outstanding factual accuracy using Form 10-Q and 424B5 filings. It cleanly demonstrates the unit-of-account blind spot: enterprise revenue can compound at 15% while per-share value erodes under 479.5 million shares and open shelves, anchoring realistic valuation around net tangible book and rerated software multiples.
Sherlock Holmes AI
The Whistleblower
Gemini 3.8 FlashThis report provides balanced forensic accounting, acknowledging the $410 million liquidity buffer while identifying the valuation ceiling imposed by share dilution. It anchors realistic defense-IT multiple deflation from 10.2x toward 3.5x sales, recognizing that inorganic Ask Sage additions cannot fully offset high general and administrative cost drag.
Universal Investor AI
The Polymath
Gemini 3.8 FlashThis analysis provides a clear bridge between federal programmatic tailwinds and the per-share dilution arithmetic. It accurately notes the 70% collapse in revenue per share despite top-line expansion, correctly identifying that ongoing ATM issuance caps equity appreciation across the five-year horizon.
J.P. Morgan AI
The Titan
Gemini 3.8 FlashPresents a balanced, institutional appraisal of defense vassal dynamics, where tier-one primes capture superior economics while the company absorbs subcontractor risks. It accurately models multiple compression toward 4.5x sales and accounts for active ATM equity issuance diluting per-share gains.
Elon Musk AI
The Visionary
Gemini 3.8 FlashThe analysis correctly diagnoses that high-touch integration services prevent pure software operating leverage. It grounds its assessment on negative $73.8 million free cash flow, though its projected multiple derating down to 2.0x is slightly aggressive given national security procurement incumbency and accredited edge enclaves.
Warren Buffett AI
The Value Seeker
Gemini 3.8 FlashGrounded in owner-earnings logic, this perspective rigorously assesses capital destruction from negative operating income and $73.8 million free cash burn. It demonstrates sound understanding of federal contracting friction, though its long-term multiple target of 2.0x slightly discounts proprietary biometric software potential.
Superintelligence AI
The Anthropologist
Gemini 3.8 FlashThis report soundly identifies the dilution trade-off behind debt retirement and models steady multiple compression toward 3.5x sales. However, it lacks deep primary filing verification and relies heavily on rhetorical framing, warranting a moderate baseline weighting.
Ray Dalio AI
The Strategist
Gemini 3.8 FlashThis perspective synthesizes the macro interest-rate headwind against defense modernization demand. It properly emphasizes that high hurdle rates penalize negative cash generation, though its path flattens out prematurely in the final years without fully modeling share count expansion.
Universal Investor AI
The Polymath
Gemini 3.8 FlashIdentifies the core tension between speculative AI positioning and labor-intensive IT contracting economics. However, it somewhat exaggerates immediate capital replenishment pressure given the substantial cash cushion, resulting in an overly steep intermediate derating.
Michael Burry AI
The Vulture
Gemini 3.8 FlashThe report highlights the 277% historical share proliferation and dilution from the 100-million-share shelf. However, its terminal multiple of 1.0x sales overlooks the defensive floor established by $409.8 million in net cash and accredited DoD enclaves, overly penalizing solvency.
Warren Buffett AI
The Value Seeker
Gemini 3.8 FlashThe owner-earnings framing correctly highlights chronic operating cash deficits and the risk of intangible goodwill write-downs. Nevertheless, the report underweights the structural downside floor provided by net cash reserves and classified facility incumbency, yielding an excessively bearish path.
Superintelligence AI
The Anthropologist
Gemini 3.8 FlashWhile accurately pointing out low underlying gross margins in legacy staffing, this report posits extreme insolvency risk and severe downside that ignores the company's verified $409.8 million cash hoard and negligible funded debt, making its fatalistic path implausible.
Niccolo Machiavelli AI
The Insider
Gemini 3.8 FlashThe contrarian bull thesis argues executive political networks will unlock sole-source contracts and quadruple free cash flow. This view is heavily downweighted because it completely ignores organic revenue contraction, the ongoing $73.8 million cash burn, and the mechanical drag of 479 million diluted shares.
Research Provenance
References & Context
This BigBear.ai consensus analysis combines structured market evidence with independent AI-agent forecasts. External references below are limited to sources recorded by the researcher agents for this forecast batch.
Primary analysis inputs
- iPulse AI Multi-Agent Forecasts — independent analyst personas, model outputs, and consensus synthesis.
- iPulse AI Global Events Context — macroeconomic, geopolitical, regulatory, and industry-event context.
- Structured market history — prices, distributions, volatility, identifiers, and listing metadata.
- Company earnings and financial statements — revenue, profitability, balance-sheet, cash-flow, and investment trends.
- Researcher web evidence — public sources consulted to challenge and contextualize the forecast thesis.
Independent AI Advisor panel
- AI Advisors
- 14
- AI Researchers
- 11
- AI Thinkers
- 3
Sources retained from AI Researcher searches
Asset-specific · Researcher webShowing the top 15 of 84 deduplicated sources retained for this batch.
- 01FY 2026 Mandatory Funding Allocation Plancomptroller.war.gov
- 02Federal Reserve Board - Federal Reserve issues FOMC statementfederalreserve.gov
- 03bbai-20260630sec.gov
- 04BigBear.ai Holdings, Inc. - Form 10-Q - FY2026sec.gov
- 05BigBear.ai Holdings, Inc. - Form 10-Q - FY2026sec.gov
- 06BigBear.ai Holdings, Inc. - Form 424B5 - FY2026sec.gov
- 07BigBear.ai Expands Generative AI Platform for DoWbigbear.ai
- 08BigBear.ai Finalizes $250M Acquisition of Ask Sage | BigBear.aibigbear.ai
- 09Homeland & Border Security AI - BigBear.aibigbear.ai
- 10Q2 2026 Results, 13% Growth & 20+ Contract Wins | BigBear.aibigbear.ai
- 11BigBear.ai Announces Full Conversion of 6.00% Convertible Senior Secured Notes Due 2029, Significantly Strengthening Balance Sheetbusinesswire.com
- 12www.businesswire.combusinesswire.com
- 13__symbol__ Stock Quote Price and Forecast | CNNcnn.com
- 14BBAI 2026 Q2 Earnings Release Deckd1io3yog0oux5.cloudfront.net
- 15BigBear.ai Holdings (BBAI) Is Pursuing Acquisitions Backed By A $100 Million Offeringfinance.yahoo.com
And 69 more sources were used and retained in the batch inventory.
Context retained with this Consensus
The same public-safe market, global-event, and fundamental context supplied to the AI Advisor panel.
Global context snapshot
2025 Full-Year Global Market and World-Events Context
Download Archived SnapshotCoverage 2025-01-01 to 2025-12-31 · Knowledge cutoff 2025-12-31
This full-year context package covers the principal geopolitical, economic, monetary-policy, technology, trade, energy, and institutional developments that shaped global markets during 2025. It gives the forecasting model a chronological account of major world events together with their likely transmission into growth, inflation, interest rates, supply chains, commodities, currencies, public markets, and sector-level investment conditions.
The package also includes monthly and quarterly macroeconomic and cross-asset reference tables spanning US and international growth, central-bank policy, sovereign yields, major equity indices, foreign exchange, energy, industrial and precious metals, and digital assets. Quarterly and full-year high-impact summaries are integrated; monthly quantitative series remain working values pending final audit, and that qualification is part of the preserved context.
| Top 3 Market Shifts From File | Date | Status |
|---|---|---|
| DeepSeek shock and AI economics reset | 2025-01-27 | OPEN ENDED TREND |
| US tariff regime escalation and trade-system rupture | 2025-02-01 | ACTIVE POLICY REGIME |
| Federal Reserve easing cycle after a prolonged hold | 2025-09-17 | ACTIVE POLICY REGIME |
Representative Sources of the Context File
And more sources from the retained context package.
2026 Year-to-Date Global Market and World-Events Context Through September 20
Download Archived SnapshotCoverage 2026-01-01 to 2026-09-20 · Knowledge cutoff 2026-09-20
January 1-September 20, 2026: monetary tightening, energy security, trade restrictions, AI financing and divergent growth; five leading market themes.
Fed raised rates to 3.75%-4.00%; ECB hike is in force and BOJ increase starts September 24. Markets through September 18, bitcoin through September 19.
| Top 3 Market Shifts From File | Date | Status |
|---|---|---|
| Renewed monetary tightening amid persistent inflation | 2026-01-30 | ACTIVE POLICY REGIME |
| Iran/Hormuz conflict and wider energy-security disruption | 2026-02-28 | ONGOING |
| Tariff legal reset and strategic supply restrictions | 2026-02-20 | ACTIVE POLICY REGIME |
Representative Sources of the Context File
And more sources from the retained context package.
Fundamental context
Income statement
9 fieldsdepreciationAndAmortization · ebit · ebitda · grossProfit · +5 more fields
Balance sheet
12 fieldscash · commonStockSharesOutstanding · longTermDebt · netDebt · +8 more fields
Cash flow
5 fieldscapitalExpenditures · dividendsPaid · freeCashFlow · salePurchaseOfStock · +1 more field
annual: 2018-12-31–2025-12-31, 8 periods; quarterly: 2023-09-30–2026-06-30, 12 periods
Currencies cited: USD (quote USD; primary reporting USD; converted/valuation USD).
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