Blue Bird (BLBD) Stock Forecast & Price Target

Blue Bird Corp is expected to benefit from an industry recovery, with a projected increase in revenue at a high-single-digit pace, driven by growth in bus sales and a shift towards alternative-powered buses. EBITDA margins are forecasted to improve significantly from approximately 13.6% in FY2024 to around 16% by FY2026, supported by the introduction of higher-priced, lower-emission models. Additionally, gross margins have already increased by about 240 basis points over the trailing twelve months average, indicating strong momentum that is likely to continue as sales volume rises and average selling prices stabilize.

Blue Bird Corp is expected to face declining EBITDA margins, projected to decrease from approximately 13.6% in FY2024 to the mid- to high-single-digit range by FY2026, indicating financial strain and lower profitability expectations. The company also contends with increased competition in the electric vehicle (EV) bus market and potential declines in sales due to factors such as the rise of virtual learning and challenges in public-sector budgets, which could adversely impact revenue. Additionally, several operational challenges, including labor cost pressures, reliance on a limited number of suppliers, and difficulties in achieving growth targets, collectively pose significant risks to Blue Bird’s capacity to meet sales and earnings forecasts.