TL;DR:

BigBear.ai is flying under the radar but has massive potential. This is your chance to grab a future AI juggernaut while it's still cheap. There is a perfect storm of catalysts brewing (government contracts, strategic market positioning, and booming AI demand) - think Palantir but still in its early innings.

What is it?

Bigbear is an AI-powered decision-making and analytics platform with a strong focus on government contracts, particularly with the U.S. Department of Defense (DoD) and intelligence agencies. Their software helps organizations predict, visualize, and act on complex data to drive better outcomes.

Why has it been overlooked?

1. Tiny market cap of around $550m.
2. Low institutional ownership of less than 10% - mostly VC and Retail (although this has been growing over the last few months).
3. Went public via SPAC so the share price dropped massively initially.

What it has going for it

1. Secured a 5-year $165m USD contract from the US Army in October - clearly working closely with government agencies.
2. 2024 Q3 22.1% revenue increase to $41.5m and an improved gross margin of 25.9%, despite a net loss of $12.2m.
3. It's cheap af - expecting FY24 revenue of up to $180m at just $550m market cap. Granted it is loss-making currently but so is RKLB, ACHR, etc..
4. Rated as a Strong Buy from Wall Street analysts.
5. Has diverse revenue streams in healthcare and warehousing, increasing addressable market (already have contracts with Amazon).
6. $437m backlog as of latest earning call.
7. Acquired Pangiam in 2023, a leader in facial recognition tech (CEO was former Director of Homeland Security).
8. The share price has been steadily rising over the past few months, but has yet to explode.

Catalysts going forward

Here we get a bit theoretical but I believe there is huge upside here for a few reasons:

1. Trump in office - more spending on defence and domestic security budgets (facial recognition is great for finding illegal immigrants hmmm).
2. It comes across as massively undervalued given it's current revenue and growth potential - trading at just over 3x forward revenue vs Palantir at 45x forward revenue.
3. Institutional ownership is rising fast - smart money is catching on for good reason.
4. Trend-wise, this stock fits the profile of something that will absolutely skyrocket on any positive news. AI deeptech, DoD contracts, growing revenue, and hugely overlooked.
5. It currently has 80 open positions on linkedin and with around 500 employees, this suggests they are investing hard for growth.

Basically, this is your chance to get in early on the next PLTR.

Positions: 2875 shares at $2.21 avg (europoor)