BigBear.ai Stock (BBAI) Volume Surges as Price Doubles in December

BigBear.ai Holdings' stock (NYSE:BBAI) experienced a significant increase in trading volume in December, as the price doubled on the final month of the year. Having closed out the first day of December at $2.20, BBAI closed the year at $4.45 for a gain of 102.27%.

Also to end the year was a notable adjustment in the company's stock price target by HC Wainwright. On Monday 30th, HC Wainwright increased their price target for BigBear.ai from $3.00 to $7.00.

Daily volume in November saw the 10 million shares level breached on 8 occasions, with the vast majority of those taking place in the second half of the month. October saw that same level achieved on only one of the trading days.

In contrast, the month of December saw 10 million shares of BBAI changing hands each trading session, with the low of 12.2 million on December 2nd being the only trading day with a volume below 30 million. The final four trading sessions of the year ended with volume of 112 million, 67.4M, 76.1M, and 66.4M, as the bulls took charge.

The Bull Case – In October, the company secured a five-year, $165 million deal with the U.S. Army, highlighting its deepening ties with government agencies. Revenue growth has been solid, with a 22.1% year-over-year increase in Q3 2024, reaching $41.5 million, alongside an improved gross margin of 25.9%.

Diversification of its client base adds another layer of strength, with notable contracts in sectors like healthcare and warehousing, including work with Amazon, contributing to a $437 million backlog. Furthermore, BigBear.ai's acquisition of Pangiam, a leader in facial recognition technology, positions the company to capitalize on increased government spending on domestic security.

The Bear Case – Profitability remains elusive, as evidenced by a $12.2 million net loss in Q3 2024, even amidst revenue growth. The company's heavy reliance on a few major clients is another concern—nearly half of its revenue in 2023 came from just three customers, creating vulnerability if any of these clients scale back or terminate their contracts.

The stock's performance has also been underwhelming over longer time-frames, with a significant decline of more than 50% from it's public debut in 2021.

In short, as you would expect, there are mixed views on the BBAI, with a history of significant breakouts that have failed to hold. On one hand you have BigBear.ai's recent quarterly earnings report presented revenue of $41.51 million, marking a 22.1% increase from the previous year. However, this figure fell short of the market expectations, which were set at $45.04 million.

Despite these mixed financial results, BigBear.ai continues to focus on providing artificial intelligence-powered decision intelligence solutions across various sectors, including national security, supply chain management, and digital identity solutions. Current interest in the stock is at a volume not seen since the March rally, and much could depend on how well a break is supported this time around. After a disappointing final day of 2024, with BBAI dropping 7.48%, the pre-market action in the first session of 2025 is indicating a gain of 2.58%.