BAER

We rate Bridger Aerospace Group Holdings, Inc. (BAER) as a Buy with a composite score of 67.2/100 at a current price of $2.60. The stock scores above average across the majority of our six quantitative factors and ranks #189 out of 7,333 stocks in our universe, reflecting a favorable risk-reward profile.

The rating is primarily driven by strength in value (97th percentile) and momentum (82th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (30th percentile) and stability (37th percentile) tempers our overall conviction. We assign a Narrow Moat rating (53/100), High uncertainty, and Standard capital allocation.

Key items to watch: sustainability of the current growth rate; the path to profitability. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Bridger Aerospace Group Holdings, Inc. holds an above-average position (#20 of 50) within the Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 67.2/100 places it at rank #189 in our full 7,333-stock universe. At $103M in market capitalization, Bridger Aerospace Group Holdings, Inc. is a small-cap player in the Services space, which limits certain scale advantages but may allow for more agile strategic execution.

The near-term outlook is constructive, with revenue growing at 422% and momentum in the 82th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 30th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of 41% (-19.0pp vs sector) narrow to operating margins of 15% (+11.9pp vs sector) and net margins of -1.3%, yielding a gross-to-net conversion rate of -3%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.

At a current price of $2.60, Bridger Aerospace Group Holdings, Inc. appears undervalued relative to its fundamentals. Our value factor score of 97/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at a P/E of 3.0x (a 87% discount to the sector median of 23.7x), EV/EBITDA of 2.1x (discounted to peers), P/S of 0.8x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a High uncertainty rating to Bridger Aerospace Group Holdings, Inc.. Key risk factors include current negative profitability (net margin -1.3%), below-average price stability (37th percentile). The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: current negative profitability (net margin -1.3%); below-average price stability (37th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 37th percentile and quality factor at the 75th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 41% provide a buffer against cost pressures. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.

We rate Bridger Aerospace Group Holdings, Inc.'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 96.5%, and the balance sheet is managed within acceptable parameters (D/E: N/A). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; Bridger Aerospace Group Holdings, Inc. falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. Absent a dividend, the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, Bridger Aerospace Group Holdings, Inc. receives a Buy rating with a composite score of 67.2/100 (rank #189 of 7,333). Our quantitative framework assigns a Narrow Moat (53/100, trend: stable), High uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 64/100.

Our analysis supports a constructive view on Bridger Aerospace Group Holdings, Inc.. The combination of identifiable competitive advantages, high uncertainty, and standard capital allocation creates a risk-reward profile that favors accumulation at current levels. We recommend investors consider adding this name to portfolios aligned with the stock's risk profile.