BigBear.ai (BBAI) shares jumped 18% in premarket trading on Tuesday after the company reported better-than-expected results and guidance, which prompted Wall Street analysts to praise the company.
“We reiterate our Overweight rating on BigBear.ai and raise our 12-month price target to $7.00 from $6.00 based on long-term secular tailwinds and expanding AI investments,” Cantor Fitzgerald analyst Jonathan Ruykhaver wrote in a note to clients. Ruykhaver noted that the topline fell 20.1% year-over-year due to federal program disruptions related to Army contracts and shutdown headwinds, but the company is seeing momentum at airports for its biometric scanner.
BigBear.ai also announced it was acquiring Ask Sage for $250M, something that Ruykhaver praised. “The acquisition expands BigBear.ai’s [total addressable market] and strengthens its position as a leading provider of AI, computer vision, and decision advantage solutions for national security,” he added in his note.
H.C. Wainwright analyst Scott Buck reiterated his Buy rating and $8 price target on BigBear.ai, due in part to the Ask Sage deal. “We expect the transaction to be margin accretive to BigBear given SaaS like margins at Ask Sage,” Buck wrote. “Following an aggressive capital raising effort, with $715M of cash and investments, we believe the company will continue to look at additional acquisitions, further accelerating growth.”