This 🇺🇸 Company Builds School Buses, And it’s Cool as Hell
A company with a strong growth and a 12x PE, what else do you need?
Hi Guys, Hidden Market Gems here 👋
Sorry, we are late… ⏰ But I have an excuse! (I have none). Anyway, let’s go into it!
While walking in the United States (I am currently in exchange here), I came across one of those iconic yellow school buses (as a French guy it’s crazy), and a random thought hit me: Who makes these buses? I tapped on my computer « Yellow Buses maker » then the curiosity led me down a rabbit hole, and before I knew it, I was deep-diving into Blue Bird Corporation.
What started as casual curiosity turned into a surprisingly interesting discovery. Blue Bird isn’t just some legacy manufacturer—it’s a company with a rich history, a sharp focus on innovation, and a bold push toward sustainable transportation with electric and alternative fuel buses. In a market that’s evolving fast, Blue Bird stands out as a key player with serious growth potential. 🚌
👋🚌 Quick Take: Blue Bird Corporation
📊 Financial Highlights:
Revenue: $1.1 billion in FY2024, reflecting steady growth driven by increased demand for cleaner, sustainable school transportation.
Electric Bus Sales: Represent 25% of total revenue, showcasing the company’s strong pivot toward electrification and alternative fuel solutions.
Profitability: Gross margin improved to 17% in 2024, thanks to cost optimization and a growing mix of higher-margin electric and propane buses.
Valuation : A 12x P/E so you can balance with crazy tech valuation.
🌟 Customer Base:
Blue Bird holds a 33% market share in the U.S. school bus market, making it one of the top players.
Its customer base includes public school districts, private schools, and transportation contractors across North America.
🌐 Market Trends:
The transition to zero-emission vehicles is accelerating, supported by government funding like the EPA’s Clean School Bus Program ($5 billion in grants over five years).
Rising demand for safer, more efficient school transportation, especially in suburban and rural districts.
Growing focus on propane and electric buses, which are cheaper to operate and maintain compared to traditional diesel models.
🐦 Why Blue Bird?
Blue Bird is a pioneer in the school bus industry, leveraging nearly 100 years of expertise to innovate and lead the shift to sustainable transportation. Its investments in electric and propane-powered buses position it as a frontrunner in a rapidly growing segment. With significant government support and increasing adoption of clean energy vehicles, Blue Bird has both the vision and the infrastructure to capitalize on this transformation.
💻📈 Company Overview
🔤 TICKER: NASDAQ: BLBD
🔢 ISIN: US0953061068
Founded in 1927 and headquartered in Macon, Georgia, 🇺🇸 Blue Bird Corporation is a leading manufacturer of school buses in North America. The company is renowned for its commitment to innovation and safety, producing a range of high-quality buses powered by diesel, propane, and electric drivetrains. With nearly 100 years of experience, Blue Bird has established itself as a trusted partner for schools and transportation providers, offering reliable and sustainable solutions.
💵 Business Model, Products, and Services
Blue Bird Corporation operates a specialized business model focused on the design, manufacturing, and sale of school buses, with a growing emphasis on clean energy solutions. With over 90 years of expertise and a market share of around 33% in the U.S., Blue Bird is a leader in providing safe, efficient, and sustainable transportation for schools and districts nationwide.
School Buses and Alternative Fuels: Go to School, Go Green
At the core of Blue Bird’s offerings is its range of high-quality school buses, including traditional diesel-powered models and an expanding portfolio of alternative fuel buses. The company is a pioneer in electric and propane-powered buses, which now represent a significant and growing portion of its sales. These vehicles align with rising demand for environmentally friendly and cost-efficient transportation options, supported by government incentives and funding programs.
Electric Bus Innovation!
Blue Bird is at the forefront of the shift to zero-emission transportation, with its electric school buses gaining traction in both urban and rural areas. These buses feature state-of-the-art battery technology, lower operating costs, and reduced environmental impact, making them a popular choice for school districts adapting to stricter emissions standards.
The Aftermarket Services
Blue Bird generates additional revenue through aftermarket parts and maintenance services, ensuring long-term customer support and a steady income stream. By offering replacement parts, training, and service programs for its buses, the company strengthens its relationships with clients and supports the lifecycle management of its fleet.
A Diversified Customer Base
Blue Bird serves a wide range of customers, including public school districts, private schools, and transportation contractors. Its diversification across various regions and customer types provides resilience against localized demand fluctuations. The company also benefits from robust government support, such as the EPA’s Clean School Bus Program, which drives investments in eco-friendly school transportation.
✨ Positive Factors for Blue Bird Corporation
Leader in Electric School Buses, Simple as That
Blue Bird has solidified its position as a pioneer in electric school transportation, delivering its 2,000th electric bus in 2024. The company leads the market in providing zero-emission solutions, supported by increased demand from school districts across the U.S. and favorable government incentives.
Public school districts remains the largest segment of Blue Bird’s customer base. With 58% of sales in FY2024 coming from alternative-powered buses (electric and propane), this highlights the increasing demand for clean energy options among districts, driven by government funding programs like the EPA Clean School Bus Program.
Look At The Recorded Financial Performance
In FY 2024, Blue Bird achieved a record $1.35 billion in revenue, marking a 19% increase year-over-year. The company sold over 9,000 buses, a 6% rise from 2023, reflecting strong demand for both its traditional and electric bus offerings.
Major Government Support for Expansion
Blue Bird secured an $80 million federal grant from the U.S. Department of Energy in 2024 to expand its electric vehicle manufacturing capacity. This funding will enhance the company's ability to meet growing demand for clean energy school buses and further its leadership in the zero-emission market.
The Comprehensive Safety Upgrades
In 2024, Blue Bird introduced its most comprehensive safety enhancements to date, including three-point seat belts for all passengers and airbags for drivers. These advancements set new industry standards for student safety and reflect the company’s ongoing commitment to innovation.
A Supportive Market and Policy Environment
The EPA's Clean School Bus Program allocated nearly $1 billion in funding in 2024 to accelerate the adoption of zero-emission transportation. Blue Bird is uniquely positioned to capitalize on this funding, as its electric and propane buses meet the program’s requirements for sustainable solutions.
A Proven Growth in Clean Energy Solutions
Alternative fuel buses now account for over 50% of Blue Bird’s sales, with electric models experiencing particularly high adoption. This shift to clean energy is not only environmentally impactful but also enhances the company's profit margins due to lower operating costs and higher customer satisfaction.
💻 Sector, Value Chain, and Customers
🚌 Sector:
School Bus Manufacturing and Clean Energy Transportation
Blue Bird operates in the specialized school transportation sector, with a growing focus on clean energy solutions. This industry is marked by high safety and regulatory standards, long vehicle lifecycles, and a significant shift toward zero-emission technologies. Blue Bird’s legacy of innovation and leadership positions it as a key player in this evolving market.
🌐 International Presence
Blue Bird Corporation is a leading player in the North American school bus market, with a growing presence in alternative fuel and electric transportation. Headquartered in Macon, Georgia, 🇺🇸, Blue Bird primarily serves the U.S. and Canada but is also expanding its reach through partnerships and international distribution.
🌎 North America: Core Market and Growth in Clean Energy
Blue Bird holds a 33% market share in the U.S. school bus industry, making it one of the largest and most recognized manufacturers. The company has delivered over 20,000 propane and electric buses, capitalizing on strong demand for sustainable transportation. In Canada, Blue Bird has a well-established network of distributors supplying school districts and fleet operators looking for high-efficiency and low-emission vehicles.
🌍 Latin America & Emerging Markets: Expansion Potential
Blue Bird is actively exploring opportunities in Latin America, where school transportation infrastructure is developing, and governments are looking for affordable and sustainable bus solutions. With its electric and propane buses, Blue Bird is positioned to meet growing environmental regulations and urban transit needs in these regions.
🌏 Global Partnerships & Future Growth
Although primarily focused on North America, Blue Bird has partnerships that could pave the way for future expansion into global markets. The company’s advancements in EV school buses and alternative fuel technology make it an attractive partner for countries seeking low-emission student transportation solutions.
🚌 Customers
No flashy logos this time as it serves public school districts, private schools, and transportation contractors across North America…
Wilkes County Schools (Georgia): Recognized as Georgia’s first district to operate an entirely clean school bus fleet, partnering with Blue Bird to transition to zero- and low-emission student transportation.
School District of Philadelphia (Pennsylvania): In 2024, Blue Bird delivered 38 propane-powered buses to this district, supporting its shift toward clean student transportation.
📈 Market and Sector Analysis
⚡️ Major Trends (Mega Trends)
Are there mega-trends supporting the company?
The Global Shift Toward Sustainable Transportation
The world is transitioning away from fossil fuels, and the transportation sector is a key focus of decarbonization efforts. In the U.S., nearly 500,000 school buses operate daily, with diesel-powered models contributing significantly to urban air pollution and childhood respiratory issues. To combat this, governments are prioritizing the adoption of zero-emission and alternative fuel school buses. The U.S. Environmental Protection Agency’s $5 billion Clean School Bus Programis accelerating this transition, offering funding to replace aging diesel fleets with electric and low-emission alternatives. As the market leader in electric and propane-powered school buses, Blue Bird is positioned to benefit from this industry-wide shift.
Electrification and Alternative Fuels Are Reshaping the School Bus Market
The transition to electric vehicles (EVs) is gaining momentum across all transportation segments. The electric school bus market is expected to grow at a CAGR of 22% through 2030, with EVs projected to account for 30-40% of new school bus sales by the end of the decade. Meanwhile, propane and compressed natural gas (CNG) buses are becoming popular transitional solutions, offering lower emissions and operating costs compared to diesel. In FY2024, 58% of Blue Bird’s total bus sales were powered by alternative fuels, highlighting the rapid transformation of the sector. As technology advances and infrastructure expands, the cost of electric and alternative fuel school buses will continue to decline, making them even more attractive to fleet operators.
Government Incentives and Regulations Are Driving Market Growth
Federal and state policies are playing a crucial role in accelerating clean school bus adoption. The Bipartisan Infrastructure Law and the EPA’s Clean School Bus Program have set aside billions in funding to replace diesel school buses with electric, propane, and CNG models. Several states, including California, New York, and New Jersey, have introduced mandates requiring school districts to transition to zero-emission fleets by 2035-2040. These policies ensure a long-term structural shift in the market, creating sustained demand for Blue Bird’s alternative fuel and EV school buses.
Lower Total Cost of Ownership (TCO) Is Increasing Adoption
While electric school buses have a higher initial purchase price, their operating costs are significantly lower than diesel models. Key advantages include:
Up to 80% lower fuel costs for electric buses compared to diesel.
50% lower maintenance expenses, as EVs have fewer moving parts.
Government subsidies covering up to 100% of upfront costs, making EV adoption financially viable for school districts.
As battery technology improves and production scales up, EV bus costs are expected to reach parity with diesel models by the early 2030s, further accelerating adoption. Blue Bird’s investment in scaling EV production, including an $80 million Department of Energy grant for a new EV manufacturing facility, positions the company to capture this growing market.
Reshoring and Supply Chain Resilience in Manufacturing
In response to global supply chain disruptions, U.S. manufacturing is seeing a push toward reshoring production and securing localized supply chains. Blue Bird is investing in expanding its Georgia-based manufacturing facility, with plans to increase annual production capacity to 14,000 buses per year on a single shift. This investment not only enhances production efficiency but also reduces reliance on foreign suppliers, ensuring the company can meet the surging demand for electric and alternative fuel buses.
💻 Market and Trends
Is the market structurally growing?
Yes. The school bus market is undergoing a once-in-a-generation transformation, driven by clean energy mandates, government incentives, and fleet modernization initiatives. The U.S. school bus industry sees ~30,000 new bus orders annually, and the shift to zero-emission transportation is creating a multi-billion-dollar market opportunity.
Electric School Bus Sales Are Gaining Momentum
Blue Bird’s electric bus bookings grew 29% YoY in 2024, demonstrating strong adoption.
The company’s backlog includes $200 million in firm EV orders, ensuring steady revenue growth.
The EPA’s Clean School Bus Program continues to fund new purchases, with billions still to be allocated.
The Role of Alternative Fuels in the Transition
While full electrification is the long-term goal, propane and CNG buses are gaining traction as transitional solutions. In FY2024, 58% of Blue Bird’s buses were powered by alternative fuels, reflecting growing demand. To solidify its leadership, Blue Bird secured an exclusive agreement to supply propane and CNG buses through 2030, reinforcing its competitive advantage in this market segment.
Policy Support Secures Long-Term Demand
The EPA’s Clean School Bus Program has committed $5 billion through 2027, funding thousands of EV and alternative fuel buses.
State mandates in California, New York, and New Jersey require fleets to phase out diesel buses, ensuring continued demand.
Federal and state-level incentives are lowering adoption costs, removing financial barriers for school districts.
Blue Bird’s Competitive Advantage in a Growing Market
More than 2,000 electric school buses delivered, making it the most established EV manufacturer in the industry.
The only OEM offering a full lineup of electric, propane, and CNG buses, providing school districts with flexible options.
Strong order backlog and expanded manufacturing capacity position the company for sustained growth.
The Order backlog is already saying a lot.
🚌 The x2 Scenario, In My Opinion
Hear me out…
Let’s dive into why Blue Bird could be one of the most exciting plays in clean transportation right now.
What sets Blue Bird apart isn’t just that they’re one of the longest-standing school bus manufacturers in the U.S.—it’s the perfect timing. The transition to clean energy in transportation is happening right now, and school districts across the country are racing to replace diesel fleets with electric and alternative fuel buses. Government incentives, regulatory mandates, and cost efficiency improvements are all aligning to make this shift inevitable. Blue Bird isn’t just adapting to the trend—they’re leading it, with a dominant position in the electric and propane school bus market.
They’re in the right industry, at the right time, with the right assets.
Now, let’s talk market trends (you know I love numbers). The U.S. has nearly 500,000 school buses in operation, and over 90% of them still run on diesel. That’s a massive replacement cycle waiting to happen. The EPA’s $5 billion Clean School Bus Program is just the beginning—state and local governments are rolling out their own funding and mandates. California, for example, has committed to making all school buses zero-emission by 2035. Meanwhile, Blue Bird’s alternative fuel buses already account for 58% of their total sales, showing clear demand.
Here’s the kicker: backlog and recurring revenue. Blue Bird’s order backlog stands at $735 million, with over $200 million in firm EV orders. That’s not just demand—it’s locked-in revenue waiting to be realized. Unlike consumer EV makers facing demand volatility, school districts must buy buses. They don’t have the luxury of delaying fleet upgrades when mandates and funding are in place. This gives Blue Bird a stable, high-visibility revenue stream that most EV companies can only dream of.
And Blue Bird’s manufacturing expansion? It’s happening. They just secured an $80 million federal grant from the Department of Energy to expand their EV production facility. By 2027, their new plant will increase production capacity to 14,000 buses per year on a single shift—meaning they’ll be able to meet surging demand efficiently. The company is scaling at the perfect time.
Now, let’s not overlook financials. In FY2024, Blue Bird posted record revenue of $1.35 billion, up 19% YoY. Adjusted EBITDA hit $183 million, more than doubling from last year. Margins are improving, and the company is not just growing—it’s getting more profitable. And the best part? Blue Bird is trading at a P/E ratio of just 12.
Let’s put that into perspective. Other companies in the clean energy transition—whether EV makers, renewable energy providers, or infrastructure players—are often trading at 40-50x earnings, if not higher. Meanwhile, Blue Bird, a company with real demand, government-backed funding, and consistent profitability, is sitting at a P/E of 12. That’s absurdly cheap for a business that is expanding into a massive, long-term, high-growth market.
The best part? 🚍 Despite all this momentum, Blue Bird is still massively underappreciated. Investors are fixated on flashy EV startups, while Blue Bird is quietly dominating an essential, government-backed, recession-proof industry. This isn’t a speculative play—it’s a business with decades of experience, strong industry positioning, and a clear path to exponential growth.
If they execute well, seeing their valuation double—or even triple—over the next few years isn’t just possible—it feels inevitable. The combination of regulatory tailwinds, high visibility revenue, and manufacturing expansion makes this one of the most asymmetric clean energy plays in the market.
Honestly, this could be one of those investments you look back on and wish you had gotten in earlier and we are talking about buses... I love stock investment. 🚀
🧪 Strategy and Innovation: Blue Bird Corporation
Blue Bird isn’t just building school buses—they’re redefining the future of student transportation. Their strategy revolves around three key pillars: leading in electric and alternative fuel bus production, expanding manufacturing capacity, and securing long-term government-backed contracts. By focusing on sustainability, safety, and efficiency, Blue Bird is transforming an industry that has remained largely unchanged for decades.
Their Fort Valley, Georgia facility serves as the hub of this transformation, producing electric, propane, and CNG school buses that set the standard for reliability and cost-efficiency. With the backing of an $80 million federal grant from the Department of Energy, Blue Bird is expanding its EV production capabilities, ensuring they stay ahead of rising demand.
But they’re not stopping there. Blue Bird is pioneering innovations in EV battery technology, charging infrastructure, and fleet management solutions, making school bus electrification more accessible and scalable. Their alternative power bus sales now account for 58% of total units, a number that will continue to rise as districts phase out diesel buses in compliance with state mandates and federal incentives.
📈 Future Projects
The future of school transportation is zero-emission, and Blue Bird is ensuring they remain the market leader. Their new 600,000 sq. ft. EV production facility, set to launch by mid-2027, will increase manufacturing capacity to 14,000 buses per year on a single shift—a critical move as school districts rush to replace aging diesel fleets.
Beyond production expansion, Blue Bird is investing in charging infrastructure solutions to help school districts seamlessly integrate EVs into their fleets. Their next-generation electric buses will feature improved battery efficiency and longer range, reducing operational costs and increasing adoption.
Government policy is also on Blue Bird’s side. The EPA’s Clean School Bus Program and state-level initiatives will fund thousands of new EV school bus purchases through 2030, ensuring a strong, predictable order backlog for years to come.
Phil Horlock, Blue Bird’s President and CEO, summed up the company’s position perfectly:
"We are in the strongest position in our company’s history. The demand for clean school transportation has never been higher, and Blue Bird is leading the charge in delivering safe, sustainable, and cost-effective solutions for school districts nationwide."
📈 Key Financial Metrics
🐦Strategic Analysis: Blue Bird Corporation
🛡️ Strengths
Blue Bird is the undisputed leader in clean school transportation. As one of the largest and longest-standing school bus manufacturers in the U.S., the company has built a strong reputation for safety, reliability, and innovation. But what truly sets them apart is their dominance in alternative fuel and electric school buses. With 58% of their sales now coming from non-diesel models, Blue Bird is ahead of the competition in meeting stringent emissions regulations and tapping into the growing demand for sustainable transportation.
Financially, Blue Bird is thriving. In FY2024, they posted record revenue of $1.35 billion, up 19% YoY, and an adjusted EBITDA of $183 million. With a P/E ratio of just 12, they remain undervalued compared to other clean energy plays. Their $735 million order backlog, including $200 million in firm EV orders, provides strong revenue visibility, reducing downside risks.
Another key strength? Government-backed demand. The EPA’s $5 billion Clean School Bus Program is actively funding electric school bus adoption, ensuring a steady stream of future sales. Blue Bird also secured an $80 million grant from the Department of Energy to expand EV production, giving them the manufacturing scale needed to capitalize on this megatrend.
⛓️ Weaknesses
Despite its strong position, Blue Bird still faces challenges. The school bus industry is highly cyclical, with purchasing decisions largely dependent on government budgets and grant availability. Any slowdown in public funding could impact short-term demand.
Additionally, while Blue Bird leads in alternative fuel buses, their EV margins remain lower than their traditional diesel counterparts due to higher battery costs and limited economies of scale. The company is investing heavily to improve margins, but profitability in this segment will take time to catch up.
Another potential weakness is supply chain dependence. Blue Bird is reliant on key battery suppliers and component manufacturers, and any disruptions—whether from geopolitical tensions, material shortages, or price volatility—could impact production and delivery timelines.
📈 Opportunities
The school bus market is at the start of a massive transformation, and Blue Bird is positioned to lead the charge. The U.S. has nearly 500,000 school buses in operation, with over 90% still running on diesel. This represents a huge addressable market, with state mandates requiring all school buses in places like California, New York, and New Jersey to be zero-emission by 2035-2040.
The shift toward electric school buses is accelerating, with EV bookings up 29% YoY in FY2024. Blue Bird’s exclusive propane and CNG bus supply agreements through 2030 also give them an edge in the interim transition market, as school districts gradually move away from diesel.
Another major opportunity? Manufacturing expansion. With their new 600,000 sq. ft. EV production facility set to launch by mid-2027, Blue Bird will increase annual capacity to 14,000 buses per year on a single shift, allowing them to scale efficiently as demand grows. Finally, cost reduction and total cost of ownership (TCO) improvements will drive long-term adoption. As battery costs decline and charging infrastructure improves, EV buses will reach price parity with diesel models in the coming years, making them the default choice for school districts.
🗡️ Threats
The school bus industry is competitive, with major rivals like Thomas Built Buses (owned by Daimler) and IC Bus (owned by Navistar/Traton Group) fighting for market share. These larger parent companies have deeper financial resources, allowing them to subsidize pricing or invest heavily in R&D to compete in the EV space. Another risk? Supply chain volatility. Battery shortages, rising material costs, or geopolitical tensions affecting raw materials (such as lithium and cobalt) could increase production costs or delay deliveries.
Additionally, while government funding is strong today, future shifts in political leadership or budget reallocationscould impact incentives for EV school buses. Blue Bird’s growth is partially tied to government support, making it vulnerable to policy changes. Finally, operational execution will be key. Blue Bird is expanding production capacity, but any delays, cost overruns, or quality control issues could hurt margins and investor confidence. They’ll need to scale efficiently while maintaining profitability in their growing EV segment.
🧿 Conclusion
Summary of Key Points
Blue Bird Corporation stands out as a market leader in the school bus industry, perfectly positioned to capitalize on the clean energy transition in transportation. With a dominant share in electric and alternative fuel buses, strong government support, and a clear path for manufacturing expansion, Blue Bird has built a business model that combines stability, scalability, and long-term growth potential. Their $1.35 billion revenue in FY2024, record-breaking $183 million in adjusted EBITDA, and $735 million order backlog highlight the strong fundamentals underpinning their operations.
What truly sets Blue Bird apart is its first-mover advantage in electric school buses. They aren’t just manufacturing buses—they’re driving the transformation of school transportation. With their new 600,000 sq. ft. EV production facility launching by 2027, an exclusive propane/CNG supply agreement through 2030, and growing partnerships with state and federal agencies, Blue Bird is strategically positioned to dominate this market for years to come. The U.S. school bus fleet remains over 90% diesel, meaning the replacement cycle is just beginning—offering a multi-billion-dollar growth opportunity.
That said, Blue Bird isn’t without risks. The company operates in a cyclical, government-dependent industry, where shifts in policy, funding, or school district budgets could create short-term volatility. They also face competition from larger manufacturers like Daimler’s Thomas Built Buses and Navistar’s IC Bus, which have strong financial backing. Additionally, supply chain risks—especially around battery production and material costs—could impact margins if not well managed. However, Blue Bird’s strategic investments in production capacity, strong government-backed demand, and focus on cost-efficient EV adoption help mitigate these risks, making them a resilient player in an essential market.
My Investment Thesis
🏦 This is not investment advice:
🔵 Strong Confidence
For me, Blue Bird represents a rare opportunity in clean transportation—an industry leader that is still flying under the radar. They are at the forefront of the government-backed electrification of school buses, strategically positioned to benefit from mega-trends like fleet decarbonization, public funding initiatives, and the broader EV transition. Their P/E of just 12 makes them one of the cheapest clean energy plays on the market, despite clear revenue growth, an expanding backlog, and rising profitability.
Bottom Line? Yep. Blue Bird is the kind of stock you look back on and wish you had bought earlier. It’s a company with a proven track record, exposure to high-growth markets, and a clear focus on innovation. While no investment is risk-free, Blue Bird’s strengths far outweigh its weaknesses, making it one of the most compelling under-the-radar clean energy opportunities in the market today.
🟣 High Risk, High Reward
🔵 Strong Confidence
🟢 Good Confidence
🟡 Watchlist
This newsletter and its articles are for informational purposes only and do not constitute financial advice or investment recommendations. Investing in financial markets involves risks, including the risk of loss of capital. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions. The opinions expressed are those of the author and do not necessarily reflect the views of any financial institution.
Very interesting company! I just wander to which extent the public funding programs you mentioned are still valid with the new administration and the famous... DOGE... ? :-)
I was looking at them too) Thx.