Value
4.4/10data confidence 20%| Component | Sub-score |
|---|---|
| P/S | 4.4 |
BBAI · Why this verdict
Why BigBear.ai (BBAI) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.1/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
BigBear.ai is a fast-growing (32% YoY) but cash-burning IT services company in a 72% drawdown, with 51% customer concentration, three recent EPS misses and only 6.2% upside to the analyst target.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue is growing 32% year-over-year, the growth score is 10/10 and the company is ranked an industry growth leader. Growth breakdown | Year-over-year revenue growth should stay above 20% over the next 12 months. | ↑Improving |
| CounterGrowth confidence is low at 0.33 and growth from a small base can be lumpy and dependent on a few contract awards. | ||
Quality scores 2.8/10 with free cash flow at -133% of revenue and ROE, ROA and operating margin components all at 0.0. Quality breakdown | Free cash flow should improve to above -50% of revenue within 12 months. | ↑Improving |
| CounterA conservative debt level and a current ratio component of 8.1 show a funded balance sheet that can finance burn for some time. | ||
Customers contributing more than 10% of revenue make up 51.0% of the total, a high customer concentration. Bear case | The share of revenue from customers above 10% should fall below 45% over 12 months. | ↓Deteriorating |
| CounterGovernment contracts are multi-year and sticky, so concentration may reflect stable demand rather than fragile dependence. | ||
EPS missed in 3 of the last 4 quarters, including -0.19 actual against -0.05 expected in October 2026. Last 4 quarters | EPS should meet or beat estimates for at least 2 consecutive quarters as losses narrow. | ↓Deteriorating |
| CounterThe March 2026 quarter beat by 83%, showing losses can narrow sharply when contracts convert. | ||
The stock is in a 72% drawdown with a 200-day slope of -13.2% per 30 days and short interest of 29%, with only 6.2% upside to the $2.76 analyst target. Momentum breakdown | Price should reclaim the 200-day average and short interest should fall below 20% within 12 months. | Tripped↓Deteriorating |
| CounterHigh short interest at 29% can fuel a squeeze if growth continues, and rising OBV shows volume accumulation. | ||
Revenue is growing 32% year-over-year, the growth score is 10/10 and the company is ranked an industry growth leader.
↑ImprovingGrowth breakdown
- Expectation
- Year-over-year revenue growth should stay above 20% over the next 12 months.
CounterGrowth confidence is low at 0.33 and growth from a small base can be lumpy and dependent on a few contract awards.
Quality scores 2.8/10 with free cash flow at -133% of revenue and ROE, ROA and operating margin components all at 0.0.
↑ImprovingQuality breakdown
- Expectation
- Free cash flow should improve to above -50% of revenue within 12 months.
CounterA conservative debt level and a current ratio component of 8.1 show a funded balance sheet that can finance burn for some time.
Customers contributing more than 10% of revenue make up 51.0% of the total, a high customer concentration.
↓DeterioratingBear case
- Expectation
- The share of revenue from customers above 10% should fall below 45% over 12 months.
CounterGovernment contracts are multi-year and sticky, so concentration may reflect stable demand rather than fragile dependence.
EPS missed in 3 of the last 4 quarters, including -0.19 actual against -0.05 expected in October 2026.
↓DeterioratingLast 4 quarters
- Expectation
- EPS should meet or beat estimates for at least 2 consecutive quarters as losses narrow.
CounterThe March 2026 quarter beat by 83%, showing losses can narrow sharply when contracts convert.
The stock is in a 72% drawdown with a 200-day slope of -13.2% per 30 days and short interest of 29%, with only 6.2% upside to the $2.76 analyst target.
Tripped↓DeterioratingMomentum breakdown
- Expectation
- Price should reclaim the 200-day average and short interest should fall below 20% within 12 months.
CounterHigh short interest at 29% can fuel a squeeze if growth continues, and rising OBV shows volume accumulation.
Per-dimension breakdown
Quality
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 2.0 |
| Op margin | 0.0 |
| Current ratio | 8.1 |
| FCF quality | 0.0 |
| Moat | 5.8 |
| Piotroski F | 6.7 |
- ▸Cash-burning: FCF -133% of revenue
- ▸Quality concerns
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
- ▸Strong growth: 32% YoY
Momentum
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 6.8 |
| OBV | 1.0 |
| MA position | 1.0 |
| Volume | 0.7 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -13.4%/30d — confirmed downtrend
Sentiment
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 3.5 |
| Analyst rating | 5.0 |
| Price target | 9.3 |
- ▸Analyst upside: 42%
Insider
6.7/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 8.2 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.5 |
| quality rank | 0.5 |
| growth rank | 8.4 |
- ▸Industry growth leader
- ▸Conservative debt levels
Technical
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.6 |
| support resistance | 6.8 |
| 52w position | 0.0 |
| gap | 6.0 |
Risk (lower is worse)
2.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.6 |
| days to cover | 2.3 |
| volatility | 0.0 |
| put call | 0.0 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 0.0 |
| debt equity | 9.9 |
- ▸High short interest justified: 29%
- ▸Elevated put/call: 6.57
- ▸High IV: 88%
- ▸Above max pain $0
Catalyst
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 1.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| news activity | 8.0 |
- ▸Estimates down -41.2% (30d)
- ▸Earnings concerns: 1B/3M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (7)
- ASYMMETRY:1.5>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:117d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.8<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
1.46
Upside
+20.9%
Downside
14.3%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 55
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -76% (>40% off 52w high)
Investment implication
The SELL_IF_HOLDING verdict reflects the MOMENTUM gate's 2.8<4.5 outcome against Growth at 10.0 and asymmetric R:R of 1.46.
The strongest dimensions are Growth at 10.0, Insider at 6.7, and Sentiment at 5.8; the weakest are Risk (lower is worse) at 2.0, Catalyst at 2.8, and Momentum at 2.8. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 1.46 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Revenue Growth
Trip ifYear-over-year revenue growth falls below 15% from current 32%.
- P2Cash Burning Weak Quality
Trip ifFree cash flow stays below -100% of revenue for 4 consecutive quarters.
- P3Customer Concentration Risk
Trip ifCustomers above 10% of revenue exceed 60% of total from current 51.0%.
- P4Repeated Earnings Misses
Trip ifEPS misses estimates in at least 2 of the next 3 quarters.
- P5Deep Drawdown High Short InterestTripped
Trip ifPrice falls below the $2.42 stop, more than 7% under the current $2.60.