BigBear.ai Before Q4 Earnings: Buy, Sell or Hold the Stock?

BigBear.ai Holdings, Inc. BBAI is scheduled to report fourth-quarter 2025 results on March 2, 2026, after the closing bell, and the key focus will be on execution momentum in national security and border security markets, the impact of recent capital raises and the Ask Sage acquisition.

BigBear.ai’s third-quarter 2025 results reflected revenue pressure but balance-sheet strengthening. Revenue declined 20% year over year to $33.1 million (but beat the Zacks Consensus Estimate by 6.5%), primarily due to lower volume on certain Army programs. Gross margin contracted to 22.4% from 25.9% in the prior-year period, while non-GAAP adjusted EBITDA turned negative at $9.4 million compared with positive $0.9 million a year ago. Its adjusted loss per share of 7 cents is wider than the Zacks Consensus Estimate of a loss of 6 cents. and 5 cents a year ago. Despite operational softness, liquidity improved significantly, with record cash and investments supporting strategic flexibility. Backlog stood at $376 million, providing future revenue visibility.

This artificial intelligence (AI) provider surpassed earnings estimates in two of the trailing four quarters and missed on other two occasions, with an average negative surprise of 12.3%.

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How Are Estimates Placed for BigBear.ai Stock?

The Zacks Consensus Estimate for the fourth-quarter bottom line has remained unchanged at a loss of 5 cents over the past 30 days. The estimated figure indicates a wider loss from the year-ago reported loss of 4 cents. The consensus mark for revenues is pegged at $32.4 million, suggesting a 26% year-over-year decrease.

For 2026, BigBear.ai is expected to register a 30.2% increase from a year ago in revenues. Its bottom line is expected to witness a loss of 25 cents per share that is narrower than the estimated 2025 figure of 93-cent loss per share. Below is what to expect in the fourth quarter for BBAI stock.

BBAI’s Earnings Estimate

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BBAI’s Revenue Estimate

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Key Factors Likely to Influence BigBear.ai’s Q4 Results

A major development influencing the fourth quarter was the closing of the $250 million acquisition of Ask Sage on Dec. 31, 2025. Ask Sage is a generative AI platform built for secure deployment across defense, intelligence and other highly regulated environments, and supports more than 100,000 users across 16,000 government teams. At the time of the deal announcement, Ask Sage was expected to generate approximately $25 million in annual recurring revenues in 2025, marking nearly sixfold year-over-year growth. While management previously indicated that the acquisition was not expected to have a material impact on consolidated 2025 results, the fourth quarter may include initial transaction-related costs and early integration activities. Investors will likely focus on management’s commentary regarding cross-selling opportunities, marketplace expansion and the pace of platform integration heading into 2026.

Government spending dynamics are also likely to have shaped fourth-quarter performance. Management had noted disruptions from a federal government shutdown, with certain contracts experiencing pauses. Although a significant portion of work was deemed mission essential, funding delays and contract timing could have affected revenue recognition and operating leverage during the quarter. At the same time, the company has highlighted anticipated opportunities tied to border security and defense spending, including investments associated with the “One Big Beautiful Bill,” which are expected to materialize into contracts next year. Any acceleration in award activity late in the year may have provided incremental support.

On the financial front, BigBear.ai entered the quarter with a strengthened balance sheet and substantial cash and investments, positioning it to fund growth initiatives and integration efforts. However, continued investments in go-to-market expansion, strategic initiatives and product development might have weighed on margins.

For 2025, the company has projected revenues between $125 million and $140 million. The fourth-quarter results will therefore be critical in determining whether BigBear.ai achieved its annual target and how effectively it managed near-term pressures while advancing its longer-term AI platform strategy.

What the Zacks Model Unveils for BigBear.ai Stock

Our proven model does not conclusively predict an earnings beat for BigBear.ai for the quarter to be reported. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) for this to happen. This is not the case here, as you will see below.

Earnings ESP: BBAI has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

You can see the complete list of today’s Zacks #1 Rank stocks here.

BBAI Stock’s Price Performance

BigBear.ai stock has lost 30% over the past six months, lagging the Zacks Computers - IT Services industry, the Zacks Computer & Technology sector and the S&P 500 index.

BBAI Stock’s Performance

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BBAI Stock’s Valuation

In terms of the forward 12-month price/sales (P/S), BBAI stock is currently trading at a discount to its industry, as shown below.

BBAI’s P/S Ratio (Forward 12-Month) vs. Industry

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BBAI’s Competitive Landscape

Among BigBear.ai’s closest competitors, Palantir Technologies PLTR, C3.ai AI and Booz Allen Hamilton BAH stand out in national security and government-focused AI. Palantir has built deep relationships across the U.S. defense and intelligence community, positioning Palantir as a dominant force in data integration and operational AI platforms. Palantir’s scale and embedded footprint often give Palantir an advantage in large, multi-year federal contracts.

C3.ai competes through enterprise AI applications tailored for defense and energy clients. The company emphasizes model-driven architecture and turnkey AI solutions, allowing it to address predictive maintenance, logistics and mission analytics use cases similar to BigBear.ai’s offerings.

Meanwhile, Booz Allen Hamilton blends consulting depth with AI deployment capabilities. The company leverages its long-standing federal relationships to integrate AI into mission workflows, making Booz Allen Hamilton a formidable rival in secure, regulated environments where trust and compliance are critical.

Why BBAI Stock Is a Hold for Now?

With BigBear.ai shares down 30% over the past six months and fourth-quarter revenues expected to decline year over year, near-term pressures remain tied to contract timing, federal funding disruptions and margin softness. Integration costs related to the recently closed Ask Sage acquisition and continued investments in product development may also weigh on profitability in the short run.

However, the company’s significantly strengthened balance sheet and $376 million backlog provide improved visibility and financial flexibility. The addition of Ask Sage enhances BBAI’s secure generative AI capabilities across defense and intelligence markets, positioning it for cross-selling and platform expansion in 2026. With revenues projected to rebound next year and losses expected to narrow, holding the stock appears reasonable as investors await clearer execution traction.

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This article originally published on Zacks Investment Research (zacks.com).

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