School bus company Blue Bird (NASDAQ:BLBD) reported Q4 CY2025 results beating Wall Street’s revenue expectations , with sales up 6.1% year on year to $333.1 million. On the other hand, the company’s full-year revenue guidance of $1.5 billion at the midpoint came in 1.5% below analysts’ estimates. Its non-GAAP profit of $1 per share was 24.8% above analysts’ consensus estimates.

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Revenue: $333.1 million vs analyst estimates of $330 million (6.1% year-on-year growth, 0.9% beat)

Adjusted EPS: $1 vs analyst estimates of $0.80 (24.8% beat)

Adjusted EBITDA: $50.06 million vs analyst estimates of $43.21 million (15% margin, 15.8% beat)

The company reconfirmed its revenue guidance for the full year of $1.5 billion at the midpoint

EBITDA guidance for the full year is $225 million at the midpoint, above analyst estimates of $219.9 million

Operating Margin: 11.3%, in line with the same quarter last year

Free Cash Flow Margin: 9.3%, up from 7% in the same quarter last year

Sales Volumes were flat year on year, in line with the same quarter last year

Market Capitalization: $1.66 billion

“I am incredibly proud of our team in delivering another outstanding quarterly result,” said John Wyskiel, President & CEO of Blue Bird Corporation.

With around a century of experience, Blue Bird (NASDAQ:BLBD) is a manufacturer of school buses and complementary parts.

Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Blue Bird grew its sales at an impressive 11.9% compounded annual growth rate. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Blue Bird’s annualized revenue growth of 11.1% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong. Blue Bird’s recent performance shows it’s one of the better Heavy Transportation Equipment businesses as many of its peers faced declining sales because of cyclical headwinds.

Blue Bird also reports its number of units sold, which reached 2,135 in the latest quarter. Over the last two years, Blue Bird’s units sold averaged 4.2% year-on-year growth. Because this number is lower than its revenue growth, we can see the company benefited from price increases.

This quarter, Blue Bird reported year-on-year revenue growth of 6.1%, and its $333.1 million of revenue exceeded Wall Street’s estimates by 0.9%.

Looking ahead, sell-side analysts expect revenue to grow 3% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and suggests its products and services will see some demand headwinds. At least the company is tracking well in other measures of financial health.

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Blue Bird was profitable over the last five years but held back by its large cost base. Its average operating margin of 6.4% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

On the plus side, Blue Bird’s operating margin rose by 10.8 percentage points over the last five years, as its sales growth gave it immense operating leverage.

In Q4, Blue Bird generated an operating margin profit margin of 11.3%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Blue Bird’s EPS grew at an astounding 42.9% compounded annual growth rate over the last five years, higher than its 11.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Blue Bird’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, Blue Bird’s operating margin was flat this quarter but expanded by 10.8 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Blue Bird, its two-year annual EPS growth of 40% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.

In Q4, Blue Bird reported adjusted EPS of $1, up from $0.92 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Blue Bird’s full-year EPS of $4.47 to stay about the same.

We were impressed by how significantly Blue Bird blew past analysts’ EBITDA expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Full-year EBITDA guidance came in ahead, but on the negative side, full-year revenue guidance missed. Overall, we think this was a decent quarter with some key metrics above expectations. The stock traded up 2.7% to $51.21 immediately following the results.

Sure, Blue Bird had a solid quarter, but if we look at the bigger picture, is this stock a buy? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.