Blue Bird Corporation BLBD, a school bus manufacturer, posted better-than-expected first-quarter fiscal 2025 earnings. It maintained its fiscal 2025 revenue and adjusted EBITDA guidance.
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Blue Bird Corporation Price, Consensus and EPS Surprise
Blue Bird Corporation price-consensus-eps-surprise-chart | Blue Bird Corporation Quote
Demand for school buses remains robust, and Wall Street analysts are taking notice, boosting their earnings estimates for the company over the past seven days.
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But then again, policy uncertainties over Trump’s administration linger. Trump is known for his unfriendly stance on electric vehicles (EVs). On his first day in office, Trump revoked Biden’s EV targets and halted the disbursement of unspent funds earmarked for EV charging infrastructure. Plus, there are tariff concerns on imports from Mexico or Canada. Against such a backdrop, is it worth placing bets on Blue Bird now, or should we wait for more clarity? Let’s find out.
Booming School Bus Demand & BLBD’s Alternative Fuel Edge
Blue Bird isn’t just any school bus manufacturer. It has carved out a niche as the leader in alternative fuel and electric-powered buses, offering propane, gasoline, and battery-electric models. The company claims that its key competitors, IC and Thomas, have ceased offering propane or gasoline-powered school buses, reinstating Blue Bird as the sole OEM supplying these critical products. That’s a big deal, considering over 90% of school buses in the U.S. still run on diesel. The shift to cleaner alternatives presents a massive growth opportunity.
The company’s backlog tells the story. Blue Bird exited the first quarter of fiscal 2025 with 4,400 buses in backlog, representing roughly six months of production. On its latestearnings callon Feb. 5, BLBD notified that it had a backlog of over 4,700 buses, representing $760 million in revenues). Its EV backlog alone accounts for $250 million, with nearly 1,000 electric buses sold or awaiting delivery in fiscal 2025. With strong demand and stable pricing, Blue Bird is in a solid position to capitalize on the transition to cleaner transportation. Its extended partnership with Ford F and ROUSH CleanTech until 2030 solidifies its leadership in low-emission student transportation.
Operational Turnaround Pays Off
Blue Bird has come a long way from its pandemic-era struggles. Back in late 2021, the company launched an aggressive plan to improve operations, cut costs and restore profitability. The turnaround was officially completed in fiscal third-quarter 2023, and the results speak for themselves.
In the last reported quarter, Blue Bird generated a net profit of $28.7 million, a massive improvement from an $11 million loss in the same quarter two years ago. The company also strengthened its balance sheet, ending the first quarter of fiscal 2025 with a record $280 million in liquidity (including $136 million in cash). Debt was reduced by $40 million over the past year. and Blue Bird has been buying back shares, with $20 million repurchased in the last six months and another $40 million still authorized.
Looking ahead, Blue Bird expects fiscal 2025 revenues between $1.4 billion and $1.5 billion, up from $1.35 billion in 2024. The company targets to sell 9,250 buses in fiscal 2025, up from 9000 sold in fiscal 2024. Of those, around 1000 are likely to be EVs, up from 700 in the previous fiscal. Adjusted EBITDA is projected to hit $185-$215 million, compared with $183 million last year. The company reaffirmed its long-term goal of $2 billion in revenue with a 15% adjusted EBITDA margin.
Trump’s EV Policy: A Risk to Consider?
One big question mark is government policy. The Trump administration has cast doubt over EV incentives. Blue Bird has some exposure here, with about 25% of its EV backlog linked to EPA rebate approvals that are currently delayed due to a policy review.
But there’s good news for investors and the company — a memo from the EPA clarified that federal funding under the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) cannot be paused during ongoing litigation. That means the Clean School Bus Program funding should resume soon, allowing Blue Bird to fulfill pending EV bus orders.
Additionally, the company secured an $80 million contract from the Department of Energy (DOE) to fund half of its $160 million plant expansion in Fort Valley, GA. While funding is currently paused, Blue Bird remains confident that it will resume once the policy review is completed. Once that happens, the company can continue scaling its EV production capacity, reinforcing its leadership in the space.
Should You Buy BLBD Stock?
Despite short-term policy uncertainty, Blue Bird’s business fundamentals remain strong. Demand for school buses isn’t going away, and the shift to cleaner alternatives is well underway. The company’s turnaround has strengthened its financial position, making it better prepared to navigate any political headwinds.
Wall Street analysts are bullish. Of the seven analysts covering BLBD, five rate it a “Strong Buy,” one calls it a “Buy,” and one a “Hold.” The average price target of $55.79 suggests a 46% upside from current levels.
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While EV-related funding concerns could create some volatility, Blue Bird’s core business is thriving. If you’re looking for exposure to the school bus industry with a green energy angle, BLBD stock remains an exciting play that you should add to your portfolio.
BLBD carries a Zacks Rank #2 (Buy) and has a VGM Score of A. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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