2 Stocks Set to Crush BigBear.ai’s Market Cap by 2028 – Here’s Why

Forget chasing yesterday's AI hype—these under-the-radar plays are building real value while legacy players bleed cash.

The Contenders: One disruptor's vertical integration slashes costs while competitors drown in cloud fees. Another's patent portfolio just became an AI arms dealer's wet dream.

Catalysts Ahead: Both companies quietly locked in government contracts that'll start printing revenue right as BigBear.ai's shelf registration shares hit the market. Timing is everything when you're fighting algorithmic short sellers.

Bottom Line: In three years, we'll either be celebrating these picks at the Nasdaq bell—or watching hedge funds use them as justification for another 'market-neutral' fund collapse. Either way, it'll be entertaining.

Image source: Getty Images.

Unfortunately for BigBear, there are some other factors keeping this high-beta stock's growth prospects in check:

• Despite the stock's surge, revenue rose a mere 5% in its latest quarter. Its annualized top-line growth over the past three years is a mere 3%.
• An order backlog is never a guarantee. BigBear's guidance calls for $160 million to $180 million in revenue in 2025, only a 7% increase at the midpoint of that range.
• Profitability seems elusive, and analysts see the deficits continuing through at least these next two years. Even the more forgiving adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) is expected to remain negative this year, according to BigBear's own guidance.

I think you can do better than that, even if it means buying into some stocks toiling away in less-buzzy trends. I believe(MODG 0.54%) and(UPWK 0.17%) -- two companies with current market caps below BigBear's right now -- will be worth more in three years. 

1. Topgolf Callaway Brands

Let's tee off with Topgolf Callaway first.

The company behind the chain of high-tech eatertainment driving ranges and several well-known golf gear brands has landed in the rough these days. Juicy profits have turned into losses, and revenue is inching lower for the second year in a row. Topgolf Callaway's trailing revenue of $4.2 billion is 26 times higher than BigBear's, even though the golf experience specialist has a lower market cap of just $1.7 billion.

It's fair to point out that Topgolf Callaway has a much higher enterprise value than BigBear, even though that is largely due to long-term lease obligations. Its actual long-term debt is a manageable $1.5 billion, as long as it can turn things around. This may seem like a big ask, but Topgolf Callaway is doing its part to put its shareholders in a position to succeed. It completed the sale of its Jack Wolfskin business for $290 million last month. It's also still on track to break its business into two before the end of this year.

Spinning off Topgolf -- a promising but capital-intensive niche leader -- should be a win-win for both publicly traded entities. Recent insider buying suggests that those who know the company best are optimistic. Despite recent challenges in this iffy economy, Topgolf is broadening the appeal of driving ranges with its slick casual dining, high-energy gameplay, and proprietary ball-tracking technology.

Leaving Callaway and its remaining gear and lifestyle brands as its own public entity will bundle the slower-growing cash cows in one investment. Two companies should be better to today's combined business, or -- in golf parlance -- in its present state, there's a hole in one.

2. Upwork

If you're looking for a profitable company that happens to be growing faster than BigBear, work up to Upwork. The online marketplace for freelancers and contractors is expected to generate $163 million in adjusted earnings this year, translating into a P/E multiple of just below 10 with its $1.6 billion market cap. Unlike Topgolf with its Leveraged balance sheet, Upwork has more cash than debt on its balance sheet, whittling down its enterprise value to less than $1.4 billion.

Revenue growth has slowed, but it has consistently been in the double digits before hitting a rough patch this year. Analysts see top-line growth resuming next year. The gig economy revolution isn't going away. Freelancing and contracting work continues to be in high demand for companies seeking a flexible workforce without the corporate overhead.

The cherry on top here is that Upwork's trailing revenue is $771 million, a nearly fivefold jump from where BigBear is now. Upwork is very profitable, with a lower market cap and a much lower enterprise value than BigBear.