Better AI Stock: BigBear.ai vs. Five9

BigBear.ai (NYSE: BBAI) and Five9 (NASDAQ: FIVN) both provide artificial intelligence (AI)-driven services. BigBear.ai develops AI modules that can be plugged into an organization's edge networks to ingest data, identify trends, and predict future outcomes. Five9's cloud-based contact centers host a mix of human and AI-powered customer support agents.

BigBear.ai went public by merging with a special purpose acquisition company (SPAC) on Dec. 8, 2021. Its stock opened at $9.84 and rose to an all-time high of $12.69 on April 13, 2022, but it now trades at less than $4.

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Meanwhile, Five9 went public at $7 on April 4, 2014. It started trading at $7.95 and skyrocketed to an all-time high of $211.68 on Aug. 4, 2021, but now trades at about $28.

Both stocks burned the investors who jumped in at their all-time highs, but could they be worth buying today? Let's take a fresh look at both companies to find out.

Image source: Getty Images.

Which AI company is growing faster?

Both companies have a history of overpromising and underdelivering. Before it went public, BigBear.ai management claimed the company could grow its annual revenue at a compound annual growth rate (CAGR) of 41% from $140 million in 2020 to $550 million in 2024. But in reality, its revenue only increased at a CAGR of 3% to $158 million during those four years.

Five9 management once aimed to grow company revenue from $610 million in 2021 to $2.4 billion in 2026. In 2022, it pushed that target back by a year to 2027. But in 2024, it only generated $1 billion in revenue. In the first quarter of 2025, it completely abandoned its $2.4 billion goal and said it would aim to achieve 10%-15% annual revenue growth for the "medium term" instead.

Both companies disappointed their investors, but Five9 has still grown at a much faster rate than BigBear.ai over the past few years. Five9 also generated more than six times as much revenue as BigBear.ai in 2024. It usually isn't a good sign when an underdog like BigBear.ai is growing at a much slower rate than its bigger industry peers.

Data source: Company earnings reports.

BigBear.ai struggled for three main reasons: its leading customer, Virgin Orbit, went bankrupt, it faced tough competition from larger AI companies, and the macro headwinds drove many companies to rein in their software spending. It acquired the AI vision firm Pangiam in early 2024 to offset some of that pressure, but its original businesses struggled to expand.

Five9 faced some of the same macro challenges, but it continued to grow as more companies replaced their existing customer support teams with its cloud-based customer support agents and AI chatbots. Its business is built to keep growing through economic downturns, which drive more companies to cut costs by outsourcing and automating their customer service jobs. Five9 also expects the growing demand for cloud-based AI chatbots to drive more companies to its new Genius AI platform.

From 2024 to 2026, analysts expect BigBear.ai's revenue to grow at a CAGR of 9%, while they expect Five9's revenue to increase at a CAGR of 10%. On the bottom line, BigBear.ai is expected to stay unprofitable for the foreseeable future. However, Five9 is expected to turn profitable this year and more than triple its net income in 2026 as it gains more higher-margin enterprise customers, improves its operational efficiency, and reduces its stock-based compensation.

Which company is more attractively valued?

BigBear.ai has an enterprise value of $1.1 billion, which is 6.5 times this year's estimated sales. Five9, with an enterprise value of $2.8 billion, trades at just 2.4 times this year's sales.

Over the past three years, BigBear.ai also increased its number of outstanding shares by more than 130% with additional stock offerings, debt conversions, and its stock-based compensation. Five9 only increased its outstanding shares by about 9% during the same period.

Over the past 12 months, BigBear.ai's insiders sold more than 30 times as many shares as they bought. Five9's insiders bought nearly three times as many shares as they sold. That warmer insider sentiment reinforces the idea that Five9 is more attractively valued than BigBear.ai.

The obvious winner: Five9

Five9 is bigger, growing at a faster rate, and has a wider moat than BigBear.ai. It also arguably has a more sustainable business model and a much clearer path toward profitability, and it's significantly cheaper relative to its near-term sales growth. All of those advantages make it a much better buy than BigBear.ai -- which is still struggling to prove its business model is sustainable.

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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Five9. The Motley Fool has a disclosure policy.