Bombardier Stock Plummets: Should Investors Buy, Sell, or Hold?
Bombardier’s stock has experienced significant fluctuations this year, reflecting a complex landscape for investors. As of 2025, the company’s share price saw an impressive year-to-date increase of 116%, surpassing even strong performers like Shopify.
Current Stock Performance and Valuations
Despite the remarkable growth, Bombardier has recently faced challenges, with its stock dropping nearly 10% over just two days. Currently, the company’s valuation metrics indicate that its enterprise value (EV) to earnings before interest, taxes, depreciation, and amortization (EBITDA) ratio stands at 15.6 times. Additionally, the price-to-forward earnings ratio is approximately 20 times.
Growth Prospects and Strategic Moves
Bombardier is emerging from a turnaround phase, focusing on its flagship Global 8000 aircraft and exploring opportunities within the defense sector. CEO Eric Martel emphasized that Bombardier jets can be adapted for demanding operations, although the company is not venturing into the production of fighter jets. Instead, it aims to modify existing platforms for surveillance and patrol missions, keeping the associated risks low through strategic partnerships.
Order Backlog and Revenue Projections
The third quarter of 2025 showed a promising increase in demand, with the order backlog soaring to $16.6 billion, up from $14.4 billion in 2024. Projected revenues for 2025 are estimated at $9.3 billion, primarily driven by business jets, while the defense segment is expected to contribute between $1 billion and $1.5 billion by 2030.
Investment Considerations
Despite the positive outlook, analysts question whether Bombardier’s high valuations present a sound investment opportunity. With aircraft deliveries projected to stabilize at 150 units annually, the current price-to-sales ratio of 1.7 times may not provide the strong case investors seek for purchasing additional shares.
Potential for Joint Ventures
Recent negotiations with Saab to potentially produce Gripen fighter jets in Canada may open avenues for growth. This project would hinge on substantial orders from the Canadian government, which has committed an $80 billion budget to the Armed Forces over the next five years. Additionally, ongoing trade discussions with the U.S. could influence these decisions.
Wrap-Up
A history of governance challenges may complicate Bombardier’s investment appeal, especially if government funds are used to secure contracts. Investors are cautious, and with stocks already rallying significantly, some analysts suggest it might be prudent to sell and realize profits. Meanwhile, those seeking growth opportunities might wish to explore other sectors, such as supply chain solutions offered by companies like Descartes Systems.
In conclusion, while Bombardier presents several growth avenues, its recent performance and elevated valuations warrant careful consideration for both current shareholders and potential investors.
