Key Takeaways Global EV sales hit about 18.5M YTD in 2025, up 21%, with EVs making up over one-quarter of new cars sold.Europe drove growth as November EV sales rose 36% year over year, helped by new incentives and more models.General Motors, BorgWarner and Blue Bird are positioned to benefit as EV adoption expands into 2026.Global electric vehicle sales reached approximately 2 million units in November 2025, bringing year-to-date sales to around 18.5 million vehicles, per Benchmark Mineral Intelligence rep ...

Core Insights - The Zacks Domestic Auto industry is poised for growth driven by affordable electric vehicles (EVs) and proposed tax incentives, despite economic challenges and rising tariffs [1][3][4] Industry Overview - The Zacks Domestic Auto industry encompasses companies involved in the design, manufacturing, and retailing of various vehicles, including passenger cars, trucks, and electric vehicles [2] - The industry is highly consumer cyclic and plays a significant role in employment and innovation, particularly in electric and autonomous vehicle development [2] Factors Shaping the Industry's Prospects - The introduction of more affordable EVs, priced at $35,000 or below, is expected to increase consumer adoption, countering the impact of higher tariffs on foreign competitors [3] - Proposed tax incentives, allowing buyers of U.S.-assembled vehicles to deduct up to $10,000 in interest on auto loans, are anticipated to stimulate demand for new vehicles [4] Market Performance - The Domestic Auto industry has underperformed compared to the broader auto sector and the S&P 500, with a return of 6.3% over the past year, while the sector and S&P 500 grew by 7.1% and 14.5%, respectively [10] Current Valuation - The industry is currently trading at an EV/EBITDA ratio of 53.06X, significantly higher than the S&P 500's 18.63X and the sector's 25.8X, indicating a premium valuation compared to historical levels [13] Company Highlights - **General Motors (GM)**: Holds a 16.5% share of the U.S. auto market, with strong demand for its brands and upcoming product launches expected to drive growth. GM has a Zacks Rank 1 (Strong Buy) and positive earnings revisions for 2025 and 2026 [14][15] - **Polaris Inc. (PII)**: Reported $1.8 billion in revenues for Q3 and expects adjusted sales of $6.9 billion to $7.1 billion for 2025. PII also holds a Zacks Rank 1, with significant earnings surprises in recent quarters [20][21] - **Blue Bird Corporation (BLBD)**: Focuses on school buses and alternative fuel applications, projecting fiscal 2026 revenues of $1.5 billion and continued growth. BLBD has a Zacks Rank 2 (Buy) and positive earnings revisions for 2026 [23][24]

Company Overview - Blue Bird Corporation, listed on NASDAQ as BLBD, is a leading manufacturer of school buses in North America with a history of innovation and quality in the transportation industry [1] Recent Performance - BLBD's recent performance shows a monthly decline of 1.28%, with a sharper loss of 7.40% in the past 10 days, which may present a strategic entry point for investors despite initial concerns [2] Growth Potential - The growth potential for BLBD is significant, with an estimated increase of 43.70%, indicating that the current market price may not fully reflect the company's value [3][6] Financial Health - A Piotroski Score of 8 for BLBD indicates strong financial health, reflecting the company's profitability, leverage, liquidity, and operating efficiency, suggesting it is well-managed and financially stable [4][6] Target Price - The target price for BLBD is set at $73, which aligns with its growth potential and suggests a substantial increase from its current price, reflecting confidence in the company's market position and financial strength [5][6]

Financial Data and Key Metrics Changes - Blue Bird achieved record sales and adjusted EBITDA for Fiscal 2025, with adjusted EBITDA of $221 million, representing 15% of revenue, which is $38 million higher than the previous year [7][20][21] - Total revenue for Fiscal 2025 reached $1.48 billion, an increase of $133 million compared to the prior year [7][19] - Adjusted net income for the fourth quarter was $43.4 million, a 68% improvement year-over-year [17] Business Line Data and Key Metrics Changes - The company sold 9,409 buses in Fiscal 2025, with an average bus revenue per unit of $146,000, up $8,000 from the previous year [7][19] - Electric vehicle (EV) sales totaled 901 units for the year, marking a 30% increase compared to the previous year [7][19] - Parts revenue for the year remained flat at $103 million, indicating strong demand due to an aging fleet [19] Market Data and Key Metrics Changes - The backlog at the end of Q4 was 3,100 units, which included 680 EVs, but has since increased to nearly 4,000 units [8][16] - Year-over-year selling prices for buses increased by almost $8,300 per unit, reflecting pricing actions and tariff recovery [9] - The company maintains a strong position in the alternative powered vehicles segment, with all powered buses representing 56% of mixed unit sales for the year [9] Company Strategy and Development Direction - Blue Bird is focusing on long-term manufacturing strategies, including automation and production efficiency improvements [4][6] - The company plans to invest in projects with clear returns and aims to maintain a disciplined pricing strategy [5][6] - The outlook for EVs remains optimistic, with expectations of stable demand supported by government funding programs [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating tariff volatility and maintaining margin-neutral outcomes [7] - The company anticipates a heavy replacement cycle in the school bus market, driven by an aging fleet and pent-up demand [9] - Management remains cautious about the impact of tariffs and material costs but expects strong demand to continue [24] Other Important Information - Blue Bird ended the year with $229 million in cash and a liquidity of $371 million, reflecting a strong financial position [22][23] - The company has repurchased $40 million worth of shares during the year and plans to continue returning value to shareholders [23][30] Q&A Session Summary Question: Importance of federal EV bus program for Fiscal 2026 guidance - Management indicated that Fiscal 2026 guidance does not rely on rounds four and five of the federal EV program, with a strong backlog supporting the outlook [39][41] Question: Order season and demand outlook - Management acknowledged that while the order season typically picks up after the Christmas break, they are confident in the underlying demand fundamentals [43][45] Question: Commercial chassis project details - Management confirmed that prototypes are being tested and received positively by customers, indicating potential for market entry [47][48] Question: EV backlog and state incentive programs - Management noted that New Jersey's updated incentive program reflects a trend of increasing state-level funding for EVs, which is expected to continue [70][72] Question: Pricing dynamics and guidance for first half versus second half - Management explained that pricing stability and the new price increase will impact the second half of the fiscal year, with a ramp expected in production [60][80]

Group 1 - Lucid Group reported a quarterly loss of $3.31 per share, which was worse than the Zacks Consensus Estimate of a loss of $2.32, representing an earnings surprise of -42.67% [1] - The company posted revenues of $336.58 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 3.38%, and showing a year-over-year increase from $200.04 million [2] - Lucid Group shares have declined approximately 45.8% year-to-date, contrasting with the S&P 500's gain of 15.1% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is -$2.31 on revenues of $434.87 million, and for the current fiscal year, it is -$8.88 on revenues of $1.26 billion [7] - The Zacks Industry Rank for Automotive - Domestic is in the top 37% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Core Viewpoint - BTIG maintains a bullish outlook on Blue Bird Corporation (NASDAQ:BLBD) due to the aging North American school bus fleet, which averages around 11 years [3] Company Summary - Blue Bird Corporation is positioned to benefit from the aging school bus market in North America, indicating potential growth opportunities [3]

Core Insights - Blue Bird has successfully transitioned to alternative fuel vehicles, resulting in significant stock performance and financial results [1][5] - The company achieved record quarterly revenue of $398 million, a 19% increase, and adjusted net income of $38.7 million, up over 26% [2][4] - Analysts underestimated Blue Bird's performance, predicting only $1 per share for adjusted net income and less than $378 million in revenue [4] Financial Performance - Blue Bird's fiscal third quarter saw a stock increase of over 27% due to strong financial results [1] - The adjusted net income per share reached $1.19, exceeding analyst expectations [2][4] - The company raised its full-year 2025 revenue guidance to approximately $1.45 billion, with adjusted EBITDA projected between $205 million and $215 million [7] Strategic Initiatives - Blue Bird has been actively upgrading its traditional school bus offerings to include alternative fuel options, particularly electric vehicle technology [5] - The company has expanded its leadership in alternative fuel offerings and successfully navigated tariffs imposed by the previous administration [6]

Financial Data and Key Metrics Changes - The company achieved record quarterly revenue of $359 million, which is $13 million higher than the previous year [11][22] - Adjusted EBITDA reached $49 million, representing a 14% margin, which is 6.5% better than the same quarter last year [10][12] - Adjusted free cash flow for the quarter was $19 million, a decrease of $35 million year-over-year primarily due to a tax carryforward benefit in 2024 [13][22] - The company ended the quarter with $131 million in cash and reduced debt by approximately $5 million over the last year [27] Business Line Data and Key Metrics Changes - The company sold 2,295 buses in Q2, with EV sales reaching 265 units, which is a 26% increase compared to last year [11][24] - Parts sales totaled $26 million, flat compared to Q1 but a slight decrease of $2 million from the prior year [24] - The average selling price for buses increased by approximately 3%, from $141,000 to $145,000 per unit [24] Market Data and Key Metrics Changes - The company ended the quarter with a backlog of nearly 5,000 units, including over 700 EVs, representing approximately $770 million in revenue [13][23] - Alternative power vehicles accounted for 57% of unit sales in Q2, significantly higher than the typical 10% to 15% mix for major competitors [14] Company Strategy and Development Direction - The company is focused on maintaining its lead in the alternative power vehicle segment and is reinvesting in operations and product development [9][10] - The introduction of a new commercial chassis is planned for 2026, with strong interest from various sectors [18][19] - The company aims to position itself as a strong long-term investment, with a target of achieving $200 million in adjusted EBITDA for the year [33][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the challenges posed by tariffs and maintaining operational stability [10][28] - The company is optimistic about the continuation of the Clean School Bus program, which is seen as a bipartisan initiative [45] - There is a cautious outlook on bookings, with a projected revenue increase of 8% from the previous fiscal year [43] Other Important Information - The company has implemented a 2% price increase on all units sold and an additional 2% increase on new orders due to tariff impacts [32] - The company is working closely with dealers and customers to manage the effects of tariffs and pricing adjustments [67][70] Q&A Session Summary Question: Margin improvements and long-term targets - Management indicated it is early to speculate on margin improvements but emphasized a strong operational background that could support future enhancements [50][52] Question: EV pricing expectations - Current tariffs are hindering the goal of reducing EV prices, with a pause in the journey to improve total cost of ownership [54][55] Question: Impact of tariffs on guidance - The company noted that while EVs face headwinds, the outlook for ICE and propane buses has improved, allowing for a stable overall guidance [56][58] Question: Dealer network response to pricing - The dealer network is collaborating closely with the company to navigate tariff challenges, and similar pricing actions have been observed across competitors [66][71] Question: Clean School Bus program funding - Funding for the Clean School Bus program remains balanced between state and federal sources, with optimism for future rounds [72][74] Question: Interest in propane and gasoline buses - The company is uniquely positioned in the alternative power segment, with strong interest in propane solutions amid EV tariff concerns [75][93] Question: Commercial chassis development - Initial customer feedback indicates greater interest in propane, with the company well-positioned to meet market demand [92][94]