Core Points - BigBear.ai has gained popularity as an AI stock, showing over 80% increase in 2025 despite volatility [1] - Investors should consider three critical factors before investing in BigBear.ai [1] Group 1: Customer Concentration - BigBear.ai primarily serves the U.S. government in national security and defense, which can be a solid foundation for growth [3] - In 2024, four clients represented 52% of total revenue, indicating high customer concentration risk [4] - The loss of a significant client, which accounted for 19% of revenue in 2022, highlights the potential vulnerability, although a new client now contributes 11% [4][5] Group 2: Low Revenue Growth - BigBear.ai's revenue growth is lagging behind industry peers, with only a 5% year-over-year increase in Q1 [7] - Analysts project a mere 3.5% revenue growth for Q2, reflecting a lack of optimism regarding future performance [7][8] Group 3: Low Gross Margins - BigBear.ai's sales ratio of 11.5 times does not appear expensive compared to typical software companies, which trade at 10 to 20 times sales [9] - However, the company’s gross margins average around the mid-20% range, significantly lower than the high 70% to low 80% range typical for successful software firms [11][14] - The focus on service rather than software provision contributes to these lower margins, suggesting a reduced long-term valuation potential compared to peers [12][14]