Bombardier (TSX:BBD.B) has had quite a journey over the past few years. The once-struggling aerospace company has undergone a major transformation, shedding its commercial aviation and rail divisions to focus solely on business jets. This shift appears to be paying off, with the company reporting steady revenue growth and improved profitability. So, let’s see if that’s going to keep up for Bombardier stock as we look into the future.
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The numbers
As of 2024, Bombardier generated $8.7 billion in revenue, an 8% increase from the previous year. Its services division, which plays a key role in long-term profitability, brought in a record $2.04 billion, hitting its targets a full year ahead of schedule. The fourth quarter of 2024 was particularly strong, with Bombardier delivering 146 aircraft, up from 138 in the previous year. Its backlog, a key indicator of future revenue potential, also grew slightly to $14.4 billion by the end of the year.
Meanwhile, adjusted net income for the full year reached $547 million, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $1.36 billion, reflecting 11% year-over-year growth. These figures suggest that Bombardier stock has solid momentum heading into 2025, even as broader market conditions remain uncertain.
Despite these positive developments, the company faces some turbulence. One of the biggest concerns is the potential impact of new U.S. trade policies, particularly a proposed 25% tariff on Canadian imports. Given that Bombardier stock exports a significant portion of its jets to the U.S., such tariffs could create pricing pressures and supply chain challenges. In response to these uncertainties, the company has delayed issuing financial guidance for 2025 — at least until it has a clearer picture of how these policies will unfold. This cautious approach signals that while management is confident in the company’s fundamentals, external risks remain a wildcard.
That said, demand for private jets remains robust, which works in Bombardier stock’s favour. The company’s order backlog stretches into late 2026 and early 2027, demonstrating sustained interest in its aircraft. Chief Executive Officer Éric Martel has emphasized that Bombardier is well-positioned to navigate challenges, pointing to its improved financial health and ongoing investments in innovation. The business jet market has proven to be relatively resilient, particularly as high-net-worth individuals and corporations continue to prioritize private travel over commercial airlines.
Future outlook
Looking ahead, Bombardier stock has ambitious financial targets. The company aims to generate $9 billion in revenue in 2025, with an adjusted EBITDA of $1.63 billion, implying an 18% margin. Plus, it expects to bring in $900 million in free cash flow while working towards a net leverage ratio of 2.0 to 2.5 times. Achieving these goals would further strengthen its balance sheet and provide more flexibility for future investments and debt reduction.
In the short term, stock performance may remain choppy due to macroeconomic uncertainties and trade policy developments. However, Bombardier stock’s long-term prospects appear promising if it can continue executing its strategy effectively. The company has done well to focus on higher-margin services and streamline operations. This should help sustain profitability even in a challenging environment. The ability to consistently expand its order backlog and maintain strong relationships with customers will be key in determining whether it can sustain its recent growth.
One of the most significant factors for Bombardier stock’s future performance will be its ability to mitigate risks associated with supply chain disruptions and cost pressures. While the company has made notable improvements in operational efficiency, any unexpected hiccups in production or delivery timelines could weigh on investor sentiment. Furthermore, if global economic conditions weaken, demand for private jets could soften, impacting new orders and overall revenue growth.
Foolish takeaway
Despite these risks, Bombardier stock’s recent financial performance suggests it is in a much stronger position than it was just a few years ago. The company has managed to rebuild investor confidence by delivering on key milestones and improving its profitability. While there are still challenges ahead, Bombardier stock’s ability to adapt and evolve will likely determine whether it can continue climbing higher over the next five years.
