Should You Invest in BigBear.ai (BBAI) Ahead of Q1 Earnings?

BigBear.ai BBAI is set to report first-quarter 2024 results on May 2.

BigBear.ai is likely to have benefited from growing government investment in its robust AI solutions.

BBAI’s ongoing contracts with the US Army, including the implementation of Phase 2 of the Army Test & Evaluation Command’s integrated mission management system, are likely to have contributed to top-line growth.

Expanding clientele, which includes the likes of Amazon’s AMZN cloud computing platform, Amazon Web Services (AWS), is likely to have driven growth during the first quarter.

BigBear.ai Holdings, Inc. Price and EPS Surprise

 

BigBear.ai Holdings, Inc. Price and EPS Surprise

BigBear.ai Holdings, Inc. price-eps-surprise | BigBear.ai Holdings, Inc. Quote

 

In the fourth quarter, BigBear.ai announced a partnership with AWS Professional Services (AWS ProServe), enabling AWS ProServe customers to access the power of BigBear.ai’s ProModel AI-driven warehousing solutions. Benefits from this partnership are likely to have been reflected in the quarter under review.

Acquisitions have been a key catalyst in strengthening BBAI’s overall portfolio. The acquisition of Pangiam Intermediate Holdings, a well-known player in Vision AI for global trade, travel and digital identity, is expected to have enhanced BigBear.ai's computer vision and predictive analytics capabilities in the quarter under review.  

However, BigBear’s first-quarter 2024 top line is expected to have been affected by challenging macroeconomic conditions and losses from the Virgin Orbit bankruptcy.

Guidance & Estimates

The Zacks Consensus Estimate for first-quarter 2024 revenues is pegged at $43.08 million, indicating a 2.21% increase from the year-ago quarter’s reported figure.

The consensus mark for loss has remained unchanged at 7 cents per share in the past 30 days. The company reported a loss of 19 cents in the year-ago quarter.

BigBear’s earnings missed the Zacks Consensus Estimate in three of the trailing four quarters while beating the same on one occasion, with a negative earnings surprise of 44.64%, on average.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

BigBear has an Earnings ESP of 0.00% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Arista Networks ANET has an Earnings ESP of +2.49% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks’ shares have gained 12% year to date. ANET is set to report its first-quarter 2024 results on May 7.

Docebo DCBO has an Earnings ESP of +8% and a Zacks Rank #3.

Docebo’s shares have declined 3.9% year to date. DCBO is set to report its first-quarter 2024 results on May 9.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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