Blue Bird Corporation (BLBD)

Fundamental analysis
Blue Bird Corporation is an American bus manufacturer from Fort Valley, Georgia. The company is best known for manufacturing yellow school buses. It is currently the largest bus manufacturer in the US. BLBD is investing massively in electrification of its buses.
In addition, the company manufactures various bus bodies such as motorhomes, mobile police offices, mobile libraries and, on a smaller scale, long-distance buses.
In 2021, the U.S. government announced a $5 trillion investment in bus electrification across the U.S. The company estimates that it can take a bite out of this subsidy by selling its electric buses, up to 30%.
BLBD still has orders for more than 5,900 buses worth about US$850 million. Of that, $155 million is for firm orders for electric buses.
The company is a member of the Russell 2000 index. Over the past year, the stock price has increased 107%.
The company’s PE is 20.16.
Results
In Q2 2024, Blue Bird Corporation sold 2,254 buses with net sales of $346 million. Overall, electric bus orders increased 56%.
The bus price increased by 19% compared to Q2 2023.
The company sold $28 million worth of spare parts (+6% YoY).
Sales have been growing solidly since Covid.
Technical analysis
The daily number of shares traded is around 500,000.
RSI is in the overbought zone after announcing excellent results a few days ago.
The stock is now trading at its highs.
The moving averages crossed at the beginning of 2024 and are still in an uptrend.
Resistances are far from the current price due to the share price increase of the last few days. The first significant level is at around $38 per share.
Conclusion
BLBD’s financial performance is improving as demand for upgrading the US school bus fleet grows. Public support in the form of $5 billion for this renewal is a huge chunk of money for all bus companies that are in this market. The BLBD expects that up to 30% of the $5 billion could go towards the purchase of its buses. That represents a purchase of up to $1.5 billion. When compared to the current total of firm orders (which represent about $860 million at list prices), this is more than double the company’s current expected revenue. In other words, this electric bus subsidy can help BLBD a lot if the company’s expectations are met.
On the other hand, the share price has already climbed solidly and the intention to get 30% of the school bus renewal subsidy is known information. So it may already be factored into the share price. Technical analysis is already pointing out that the stock is overbought and thus may go down.