Snowflake, with its high price-to-sales (P/S) ratio of 18.6, soared on a wave of investor optimism. Palantir’s even richer P/S ratio of 24.1 suggests that it may be overvalued even compared to Snowflake. BigBear.ai, on the other hand, has a more modest P/S ratio of 2.0.

The equation changes dramatically if you move from sales performance to earnings performance. Snowflake and Palantir trade at triple-digit multiples to projected earnings. Price to free cash flow multiples are between 60 and 80. Those nosebleed-inducing numbers are more than enough to keep value investors away.

But BigBear is not profitable in any meaningful sense. The company recently achieved positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) and operating cash flow, but only for one quarter and by the narrowest of margins. That’s a good start, but results for four quarters remain negative. Therefore, traditional valuation metrics don’t make sense for this loss-making company.

Ultimately, the decision on whether to invest in BigBear.ai depends on your individual risk tolerance and investment goals. Carefully weigh the potential benefits and risks before making a decision. Personally, I would prefer to take another look at Snowflake or Palantir before putting real money into BigBear.ai stock.