Given BigBear.ai’s (BBAI) lack of revenue growth in the first quarter, combined with the high valuation of its stock and its competitive threats, investors should avoid owning its shares.
Also noteworthy is that BBAI stock has performed poorly in 2026, suggesting that Wall Street and retail investors are starting to give up on the name. While BBAI still has significant growth opportunities and increased its backlog significantly in Q1 versus the previous quarter, its negative attributes seem to outweigh its positive aspects for now.
Flat Revenue, a High Valuation, and the Weakness of the Stock
BigBear’s revenue fell 1% last quarter versus the same period a year earlier to $34.4 million. The company cited “lower volumes on Army programs” as the key reason for the poor revenue performance. The Army’s apparent lack of enthusiasm for BBAI’s offerings is certainly discouraging and significantly reduces its overall potential going forward.
The company’s lack of revenue growth is consistent with my previous thesis that Ask Sage, BigBear’s AI platform, is operating in an increasingly competitive environment alongside offerings from Palantir (PLTR), OpenAI, and Anthropic. Although NASA, the Army’s Intelligence and Security Command, and the Naval Research Lab adopted the platform in Q1, those wins have not yet translated into meaningful top-line acceleration.
Despite these issues, the price-sales ratio of BBAI stock is a rather high 10.6 times. Further, its forward price-sales ratio, based on analysts’ average 2027 revenue estimate for the firm, is not much lower, coming in at 9.4 times.
In the month that ended on July 13, the shares had tumbled 22%, while they were down 43% in all of 2026.
The Positive Aspects of BBAI
BigBear’s backlog jumped 14% in Q1 compared with the previous quarter to $281.9 million. But the gain was “primarily driven” by one “contract with an intelligence community customer,” the company noted. Since the increase was primarily due to one deal, which could be worth up to $53 million, such an uptick may be a one-time phenomenon. On the other hand, it’s encouraging to see that the company’s products appeal to the intelligence community.
BigBear also obtained new contracts from airports in Chicago and Dallas, while it stated that it “was seeing continued demand” for its ProModel system which provides “predictive analytics.”
Finally, BBAI CEO Kevin McAleenan reported that Markwayne Mullin, the new Department of Homeland Security secretary, “has strongly signalled his intent” to increase the funding for projects that BigBear can carry out.
The Bottom Line on BBAI Stock
BigBear can benefit from increased adoption of a number of its products, including ProModel and its airport-security offerings. It can also get a meaningful lift from Mullin’s agenda.
But the stock’s elevated valuation, the Street’s lack of enthusiasm for the name and its high valuation make it quite unappealing at this point.
*This article is intended to be informational only; it is not financial advice.
