Blue Bird (BLBD) Stock Forecast & Price Target

Blue Bird Corp is projected to experience significant financial growth, with EBITDA margins expected to expand from approximately 13.6% in FY2024 to 15% by FY2026, and a long-term target of 16% being brought forward to FY2026. The company anticipates high-single-digit revenue growth in the near term, driven by increased bus sales and a rising share of alternative-powered buses, which will provide additional revenue and margin enhancements. This positive trajectory supports a favorable outlook for Blue Bird's financial performance, suggesting strong potential for future profitability and cash flow generation.

Blue Bird Corp is facing a concerning decline in EBITDA margins, projected to fall from approximately 13.6% in FY2024 to the mid- to high-single-digit range by FY2026, indicating weakened profit sustainability. Several critical challenges contribute to this negative outlook, including an inability to meet management's growth targets, reliance on limited suppliers, and significant labor wage pressures that risk further margin deterioration. Additionally, factors such as a pull-back in bus pricing, an uptick in warranty claims linked to new products, and potential difficulties for customers to secure financing to purchase buses compound the risks to the company’s operational stability and financial performance.