Can BigBear.ai Build Stronger Growth Heading Into 2027?
BigBear.ai Holdings, Inc. BBAI is positioning itself for stronger revenue growth in 2027, supported by expanding defense-related AI demand, contract wins and strategic acquisitions. Management is prioritizing revenue acceleration and targeted investments to strengthen its presence in national security, trade and travel markets.
In the second quarter of 2026, revenues increased 13% year over year to $36.7 million, while the gross margin expanded 781 basis points to 32.8%. The company reaffirmed its 2026 revenue guidance of $135-$165 million, targeting 17% growth.
Contract Momentum Supports BBAI's Growth Prospects
BigBear.ai secured more than 20 contracts during the quarter, with individual values reaching $5 million. Backlog increased 9% from 2025-end to $269.6 million, improving revenue visibility.
Growth opportunities are expanding through Ask Sage's generative AI platform, CargoSeer's customs inspection capabilities and ConductorOS drone orchestration technology. Recent wins include a five-year CargoSeer deployment in El Salvador and an Ask Sage engagement with the U.S. Naval Air Systems Command.
Additionally, BigBear.ai's $409.8-million cash and investment position provides flexibility to pursue acquisitions that could accelerate growth heading into 2027.
Can BBAI Overcome Profitability Challenges?
Despite improving revenues and margins, profitability remains concerning. The second-quarter adjusted EBITDA loss widened year over year to $11.6 million from $8.5 million, reflecting higher sales, marketing and research investments.
Government procurement delays, contract execution risks and acquisition integration challenges could also constrain momentum.
Nevertheless, expanding product adoption, a growing backlog and acquisition opportunities provide a foundation for stronger growth in 2027, provided BigBear.ai converts its pipeline into sustained revenues while controlling operating expenses.
BBAI Faces Competition From Defense & Enterprise AI Players
Palantir Technologies PLTR is a major competitor to BigBear.ai in defense analytics, intelligence and mission-critical AI applications. Palantir's Artificial Intelligence Platform and Maven Smart System support military decision-making, battlefield intelligence and operational coordination. Palantir's expanding government relationships, established defense contracts and deployment capabilities strengthen its competitive positioning. Its ability to integrate AI across classified environments could challenge BigBear.ai's efforts to expand its defense technology footprint.
C3.ai AI also competes in government-focused AI solutions, particularly predictive analytics, generative AI and operational intelligence. C3.ai's enterprise AI platform supports defense readiness, logistics optimization and mission-critical applications across federal agencies. C3.ai has expanded its relationships with the U.S. Navy, Army and intelligence community, strengthening its government presence. C3.ai's growing defense portfolio and agentic AI capabilities could intensify competition for BigBear.ai as federal agencies increase AI investments heading into 2027.
BBAI’s Price Performance, Valuation & EPS Estimate Trend
Shares of BigBear.ai have plunged 27.1% over the past six months, underperforming the Zacks Computers - IT Services industry, as shown below.
BBAI’s 6-Month Price Performance
Image Source: Zacks Investment Research
The 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 7.25, as evidenced by the chart below.
BBAI’s Valuation (P/S F12M)
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for BBAI’s 2026 loss per share has been unchanged in the past 60 days, as shown below. However, the estimated figure indicates a narrower loss than the year-ago loss of 82 cents per share.
EPS Trend of BBAI
Image Source: Zacks Investment Research
BBAI’s Zacks Rank
BigBear.ai currently carries a Zacks Rank #3 (Hold). 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).
