This Sub $5 Stock Just Received A Massive $2.4 Billion FAA Contract... (Shares Explode +30%)

As the market tries to filter its way through the mixed signals of labor market woes following an 8 day consecutive rally - one little known company sitting less than $5 a share is skyrocketing +30.45% on the day. 

(Source: Giphy) 

The stock? BigBear.ai Holdings. “BigBear who?” That’s exactly what I thought, however, this company has just made headlines as they’ve just snagged a chunk of a sweet $2.4 billion FAA contract.

(Source: Barrons) 

Interesting, more details please…

In short, BigBear.ai is now part of the FAA's IT dream team as they’ve officially become subcontractors under Concept Solutions, LLC, and tasked with supporting the FAA's non-National Airspace System IT services. 

Of course, that may sound like mumbo jumbo to some, but this is IT resource management we’re talking about here aka financial wizardry and cybersecurity magic. (Not Crowdstrike magic). 

(Source: Reddit)

Which is why now, the FAA, with a shared ceiling of $2.4 billion over ten years is not only looking to completely overhaul it’s IT services, but it’s bringing BigBear.ai into the fold - whereas BigBear will be managing information systems nationwide, supporting everything from admin tasks to security protocols. Which is a pretty credible and crucial invite to the big dawg table if you ask me…

(Source: Business Wire) 

Especially when you compare the size of the contract to the history of BigBear.ai’s stock. For instance, while the stock is up +37.30% over the past five days, it’s still down -13.50% YTD. Digging back even further, the company has lost nearly -82% of its value… until today obvi. 

(Source: Google Finance) 

Now of course, despite the roller coaster nosedive, Robert Wedertz, SVP of Federal at BigBear.ai, couldn't be more proud of this contract as he basically stated “BigBear’s expertise in modernization and deep integration makes them stand out”. 

(Source: GovCon Wire) 

However, when you look at the recent earnings, it makes you wonder what the heck the guy is looking at that we aren’t. For example, while BigBear.ai beat EPS estimates by a whopping +42.86% they still only reported -$0.04 EPS. Meaning they lost money as their year-over-year operating income plunged by -30.9%. 

(Source: Yahoo Finance) 

With that said though, BigBear.ai’s net income did increase as it rose +30.53% year-over-year at -$11.74 million. So clearly the company hasn’t been integrating their products with profits for quite some time, which again, is why the stock responded so well to the news. 

But given the fact that the company is sitting at a negative P/E ratio of -1.6, with more liquid assets than short-term obligations, the company has definitely budgeted a financial backstop fairly well. Which is definitely encouraging to say the least. 

(Source: Giphy) 

On the other hand, while BigBear.ai’s financials look about as mixed as a bag of trail mix, the technical price action is looking sweeter than Alabama sweet tea. For example, 16 out of 17 technical indicators are flashing “Strong Buy” while all 15 moving averages are showing an uptrend continuation for BigBear.ai. 

So with all of that, what’s the takeaway for investors?

Well simply put, the stock is definitely flying with immense momentum behind it. Because now with a piece of this massive $2.4 billion FAA contract behind them, strong technicals, and not to mention a dirt cheap stock price sitting at $1.74 per share… Well, the stock definitely has legs to run. 

(Source: Giphy) 

However, I’d still make sure to do a bit more due diligence to see if the risk is worth it or not. But given the fact that the stock is down -82% from its five year highs, it definitely fits the YOLO criteria for “BTFD”. So for you degenerate investors out there, do with that what you will. 

(Source: Giphy) 

And more importantly, regardless of what you decide to do, take what I say with a grain of salt. I’m no financial wizard. In fact, if my brain was put in a duck, I’d bet you money it would start flying backwards… so as always don’t be dumb and make sure that this stock is right for you.

At the time of this writing, BigBear.ai Holdings is up +29.69% on the day, and down -13.75% YTD. 

Stocks.News does not hold positions in any companies mentioned in the article.