School Bus Manufacturer Ranks as Top Performing EV Stock of the Year

Blue Bird Corp., a leading school bus manufacturer with a market capitalization of approximately $2 billion, has emerged as the top-performing electric vehicle stock this year. The company’s shift from diesel and gas-powered buses to electric buses has been accelerated by substantial government funding, particularly through the US Environmental Protection Agency’s Clean School Bus Program introduced in the 2021 Bipartisan Infrastructure Law. This program, which provides $5 billion in funding to replace diesel school buses with electrified buses, has propelled Blue Bird’s electric bus business to new heights.

In the recent fiscal second-quarter earnings report, Blue Bird reported a 15% year-over-year revenue growth to $346 million, surpassing analysts’ expectations by nearly $50 million. Profits more than tripled to $0.89 per share, indicating a strong performance in the EV sector. The company’s record sales of 210 electric school buses in the quarter, accompanied by a backlog of approximately 500 electric buses, reflect the increasing demand for eco-friendly school transportation solutions.

With electric school buses contributing 9% of Blue Bird’s revenue, up from 6% the previous year, the company stands to benefit from higher average selling prices and increased profit margins compared to traditional buses. Research from Barclays reveals that electric school buses can command prices exceeding $300,000, significantly higher than the $100,000 price tag of conventional buses. This shift in revenue and gross margin structure has been noted by Blue Bird CEO Phil Horlock, signaling a positive trajectory for the company’s financial performance.

Analyst firm Needham remains optimistic about the growth prospects of Blue Bird’s EV business, predicting continued strong demand as more school districts opt for electrified buses under government programs. The firm maintains a “Buy” rating on Blue Bird, with a price target of $52, highlighting the potential for sustained growth in the electric school bus segment. As Blue Bird continues to expand its presence in the EV market, industry peers are also expected to benefit from the evolving landscape of environmentally-friendly transportation solutions.