DA Davidson reiterates buy rating on Blue Bird stock amid industry data

Published 23/06/2025, 16:10
DA Davidson reiterates buy rating on Blue Bird stock amid industry data

Investing.com - DA Davidson has reiterated its Buy rating on Blue Bird Corp (NASDAQ:BLBD), a company currently trading below its InvestingPro Fair Value, following the release of May bus industry data that showed mixed trends in the school bus market. The company maintains a "GREAT" financial health score, supported by strong balance sheet metrics and a modest P/E ratio of 12.7x.

The May data revealed an 18% year-over-year decrease in school bus orders, though production increased by 1% compared to the same period last year. Despite the order decline, industry backlogs remain elevated, suggesting sustained demand in the sector.

The analyst noted that comparisons were particularly challenging in May, but emphasized that production numbers continue to track well above normal levels. This production stability comes despite the significant drop in new orders for the month.

Blue Bird had previously indicated it continues to see "robust" demand trends and guided to double-digit year-over-year deliveries growth in the second calendar quarter during its early May communications. This outlook suggests the company maintains confidence in its near-term performance despite the broader industry order slowdown.

DA Davidson continues to recommend Blue Bird stock, stating the company appears positioned to "surprise skeptics and ultimately reach its FY:25 and medium-to-long-term financial targets" despite the mixed industry data from May.

In other recent news, Blue Bird Corporation reported its second-quarter 2025 financial results, surpassing earnings expectations with an earnings per share (EPS) of $0.96, slightly above the forecast of $0.95. The company’s revenue also exceeded projections, reaching $359 million compared to the anticipated $355.19 million, marking a $13 million increase year-over-year. Despite these positive results, the stock experienced a decline in trading. Blue Bird maintained its leadership in the electric vehicle segment, selling 265 electric buses, which is a significant increase from the previous quarter. The company continues to face challenges, including potential impacts from tariffs on its EV segment and supply chain disruptions. However, it remains committed to innovation, as demonstrated by the introduction of a new commercial chassis at the Work Truck Show. Analysts from firms like D.A. Davidson have noted the company’s strong operational performance and strategic positioning in the alternative power vehicle market. Blue Bird’s full-year revenue guidance remains between $1.4 billion and $1.5 billion, with an adjusted EBITDA target of $200 million.

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