Blue Bird (BLBD) Stock Forecast & Price Target

Blue Bird Corp has demonstrated strong financial performance, with gross margins for the quarter rising to approximately 21.4%, reflecting a sequential increase and a year-over-year improvement, which underscores effective pricing discipline and operational efficiency. The company is anticipated to achieve high-single-digit revenue growth in the near term as it continues to expand its bus sales, particularly in the alternative-powered segment, thereby enhancing future margins and free cash flow. Furthermore, projected EBITDA margin growth from around 15% in FY2025 to 16% by FY2027 indicates a solid trajectory for profitability driven by higher average selling prices and a favorable mix of lower-emission models.

Blue Bird Corp's stock outlook is negative primarily due to a significant decline in the share of powered buses in total deliveries, dropping to approximately 48% from 54% in the previous quarter, which indicates a weakening demand for alternative-powered solutions. Additionally, the projected contraction of EBITDA margins from about 13.6% in FY2024 to the mid- to high-single-digit range by FY2026 reflects worsening profitability prospects, further compounded by a 1% year-over-year decline in Parts sales. The company's backlog has decreased significantly by approximately 35% year-over-year, suggesting diminishing future revenue opportunities and potential challenges in achieving management's growth targets.