Blue Bird (BLBD) Stock Forecast & Price Target

Blue Bird Corp is expected to experience a significant enhancement in its EBITDA margins, projecting an increase from approximately 13.6% in FY2024 to 15% by FY2026, with a longer-term margin target of 16% being advanced to the same fiscal year. Revenue forecasts indicate a high-single-digit growth rate in the near term, driven by increased bus sales and a growing focus on alternative-powered bus offerings. This strategic direction is anticipated to contribute to incremental benefits in revenue, margins, and free cash flow over the coming years.

Blue Bird Corp faces several significant challenges that contribute to a negative outlook on its stock. Key issues include projected EBITDA margin contraction from approximately 13.6% in FY2024 to mid- to high-single-digit levels by FY2026, coupled with management's failure to achieve growth targets and the pull-back in bus pricing. Additionally, the company's reliance on key suppliers, inability to ramp up alternative-powered bus production, and underfunded defined benefit plans further underscore the financial risks and uncertainties impacting its future performance.