Blue Bird (BLBD) Stock Forecast & Price Target

Blue Bird Corp has demonstrated robust growth in its bus segment, with FY4Q25 bus revenue reaching approximately $384 million, marking a 19% year-over-year increase, driven by higher deliveries and average selling prices (ASPs). The company's EBITDA margins also showed significant improvement, rising to approximately 17%, fueled by a combination of increased bus sales and a strong revenue performance of around $409 million, leading to expectations of further margin expansion in the coming years. Furthermore, Blue Bird is well-positioned to capitalize on the transition towards alternative-fueled buses, which is anticipated to enhance its revenue, margins, and free cash flow as the industry progresses towards cleaner transportation solutions.

Blue Bird Corp is experiencing declining backlogs, with units down approximately 37% year-over-year, indicating potential challenges in meeting future sales expectations. The forecasted contraction in EBITDA margins—from about 13.6% in FY2024 to mid- to high-single-digit percentages by FY2026—reflects significant pressure on profitability amidst increasing competition and potential shifts in public sector budgets. Additionally, several risks, including reliance on key suppliers, labor wage pressures, and underfunded pension obligations, contribute to a heightened uncertainty surrounding the company’s financial stability and growth prospects.