BigBear.ai (BBAI 0.26%), a developer of artificial intelligence (AI) modules for edge networks, has seen its stock decline nearly 70% since it went public by merging with a special purpose acquisition company (SPAC) on Dec. 8, 2021. Like many other SPAC-backed start-ups, BigBear.ai set some ambitious growth targets but missed them by a mile.
Prior to going public, BigBear.ai claimed it could grow its annual revenue from $182 million in 2021 to $550 million in 2024. But in reality, its revenue only rose from $146 million in 2021 to $158 million in 2024 as it struggled with macroeconomic headwinds, intense competition, and the bankruptcy of its major customer Virgin Orbit in 2023.
Image source: Getty Images.
For 2025, analysts only expect its revenue to rise 8% to $170 million as it slogs through those challenges. It's also on its third CEO since its public debut, and it recently delayed its latest 10-K filing to restate all of its financial statements for 2022 and 2023. It needs to fix some calculation errors regarding its convertible notes that will mature in 2026.
With a market cap of $886 million, BigBear.ai still doesn't look like a bargain at 5 times this year's sales. The bulls might expect its newest CEO -- Kevin McAleenan, who served as the Department of Homeland Security's acting secretary for about six months in 2019 under the first Trump administration -- to bring in some fresh government contracts, but it's still deeply unprofitable.
So instead of betting on BigBear.ai's long-shot turnaround, investors should check out two smaller tech stocks that could eclipse its market cap within the next two years: BlackSky Technology (BKSY 0.40%) and Jumia Technologies (JMIA 1.41%).
BlackSky Technology
BlackSky develops real-time imagery and analytics software for satellites. Its AI-powered system can quickly spot vehicles, aircraft, vessels, and buildings, and it crunches that visual data to help its clients make more efficient decisions. It serves a wide range of customers across the national security, supply chain management, crisis management, critical infrastructure monitoring, and economic intelligence markets. It went public by merging with a SPAC in 2021.
NYSE: BKSY
Key Data Points
From 2021 to 2024, its revenue grew from $34 million to $102 million (a compound annual growth rate (CAGR) of 31.6%). Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) also turned positive in 2024. That growth was largely driven by the market's robust demand for its new Gen-3 satellite's imaging and AI services.
From 2024 to 2026, analysts expect its revenue to rise at a two-year CAGR of 28% to $168 million as its adjusted EBITDA grows at a CAGR of 89%. With a market cap of $277 million, it trades at just 2 times this year's projected sales.
Assuming BlackSky matches analysts' estimates, grows its revenue by another 28% in 2027 to $215 million, and trades at a more optimistic 5 times its forward sales, its market cap could swell to $1.08 billion within the next two years. If BigBear.ai's growth stalls out and its valuations crumble during those two years, it could be worth a lot less than BlackSky.
Jumia Technologies
Jumia is one of the largest players in Africa's fragmented e-commerce market. It's based in Berlin, but it currently operates across nine African countries: Algeria, Egypt, Ghana, Ivory Coast, Kenya, Morocco, Nigeria, Senegal, and Uganda.
Jumia's website attracted more than 800 million visits in 2024, and it hosts roughly 70,000 sellers, over 117 million products, and 5.4 million active consumers. It's still tiny compared to Amazon, but its early-mover advantage could make it a great long-term play on Africa's rising internet penetration and online shopping rates.
NYSE: JMIA
Key Data Points
Jumia went public via a traditional IPO in 2019. From 2020 to 2024, its revenue only grew at a CAGR of 4% from $140 million to $161 million. Its adjusted EBITDA also remained negative as it racked up more net losses.
Unlike many other e-commerce companies, Jumia didn't experience a growth spurt during the COVID-19 pandemic. Instead, the health crisis throttled its growth by disrupting its supply chain and logistics networks while curbing consumer spending. The African market also recovered from the pandemic at a slower rate than other higher-growth markets.
From 2024 to 2027, analysts expect its revenue to grow at a three-year CAGR of 7% to $197 million as its adjusted EBITDA stays in the red. But with a market cap of $274 million, Jumia trades at just 1.5 times this year's sales. But if the African market stabilizes, Jumia merely matches analysts' estimates, and it trades at 5 times forward sales by the beginning of 2027, its market cap could grow to $985 million. If its growth accelerates, its valuations could soar even higher as the bulls rush back. Therefore, this little e-commerce underdog also has a shot at overtaking BigBear.ai over the next two years.
