Bridger Aerospace: A Leading Aerial Firefighting Services Provider

Bridger Aerospace Group Holdings is the largest US provider of aerial firefighting services, based in Montana. The company specializes in wildland fire management and offers its expertise to federal, state, and local agencies. Bridger Aerospace's services include water bombing, fire retardant delivery, and reconnaissance flights. With a fleet of over 40 aircraft, Bridger Aerospace is well-equipped to provide emergency services during wildland fires.

Bridger Aerospace Group Holdings, Inc. (NASDAQ: BAER), headquartered in Belgrade, Montana, is the premier U.S. provider of aerial firefighting services. The company specializes in wildland fire management and offers its expertise to various federal and state government entities, such as the United States Forest Service (USFS). With a robust fleet of over 40 aircraft, including CL-415EAF "Super Scooper" aircraft and surveillance aircraft equipped with fire imaging technology, Bridger is well-positioned to respond to the growing wildfire threat exacerbated by climate change.

Financial Performance

Bridger delivered robust financial performance in Q1 2025, with record revenue of $15.6 million, an increase of 184% compared to Q1 2024. This growth was driven by early deployment, the acquisition of FMS, and work on the Spanish Super Scoopers. The net loss narrowed to $15.5 million, with adjusted EBITDA improving to -$5.1 million, reflecting enhanced operational efficiency. The company aims to achieve $105 million to $111 million in revenue in 2025, driven by long-term contracts and prolonged fire seasonality [1].

Debt Management

Bridger's debt portfolio, totaling $207.6 million as of March 31, 2025, is dominated by the $160 million Series 2022 Bonds with 11.5% interest, which pose a significant refinancing challenge. The company's debt management strategy relies on leveraging asset sales, securing predictable revenues, and maintaining covenant compliance to manage its obligations while funding growth. The high interest burden and 2027 maturity concentration require vigilant monitoring [1].

Market Position

The aerial firefighting market is projected to grow from $1.2 billion in 2024 to $14.16 billion by 2029, driven by increasing wildfires. Bridger mitigates competitive challenges through its niche in firefighting, early-season operations, and technology integration through FMS, which contributed $1.9 million in revenue in the first quarter of 2025. The $46 million sale-leaseback expected in Q3 2025 and long-term contracts with USFS, DOI, and Montana provide financial and operational stability [1].

Stock Price Recommendation

The stock price of Bridger Aerospace has an upside of over 170%, based on a discounted cash flow analysis. The objective is to explain and detail the DCF calculation while clarifying the assumptions used and taking into account recent financial results in Q1 2025 and growth catalysts. The terminal value is $431.869371 million, and the enterprise value is $383.05 million. The stock has an optimistic scenario with lower risk (11% of WACC), assuming stronger wildfire seasons and new contracts. The $46 million sale-leaseback supports liquidity, making the stock undervalued [1].

Risks

The investment thesis for Bridger Aerospace faces several risks, including significant losses in the off-season, delays or cancellations in contracts due to federal budget cuts, and the inability to refinance the 2027 bonds or manage interest expenses. These risks could erode profitability and cash reserves [1].

Conclusion

Bridger Aerospace Group Holdings is well-positioned to benefit from the growing wildfire threat due to climate change. With a strong fleet, diversified services, and strategic debt management, the company is poised for growth. However, investors should be aware of the risks associated with the business model and the potential impact of federal budget cuts on contract renewals.

References

[1] https://seekingalpha.com/article/4800019-bridger-aerospace-group-fresh-water-in-a-world-on-fire