Assessing Blue Bird’s (BLBD) Valuation After a Strong Q4 Beat, Analyst Upgrades and Insider Buying

Fourth Quarter Beat and Insider Buying Put Blue Bird in Focus

Blue Bird (BLBD) just delivered a stronger than expected fiscal fourth quarter, with earnings and revenue topping forecasts, followed quickly by an insider share purchase that underscores management’s confidence.

See our latest analysis for Blue Bird.

The upbeat quarter and insider buying come after a choppy few months, with a roughly flat 1 month share price return. However, the year to date share price return of about 31 percent and a standout 3 year total shareholder return above 300 percent suggest the longer term momentum story is still very much intact.

If this kind of momentum backed by fundamentals interests you, it might be worth exploring auto manufacturers to see what else is lining up for the next leg higher.

With shares up strongly in recent years, yet still trading below analyst targets and our intrinsic value estimate, investors now face a key question: Is Blue Bird undervalued, or is the market already pricing in its future growth?

Most Popular Narrative Narrative: 20.7% Undervalued

With Blue Bird last closing at $50.53 against a narrative fair value of $63.75, the story centers on whether margin gains can keep powering upside.

Blue Bird's leadership in alternative powered buses (with over 60% of unit mix and exclusive propane offerings) positions it for incremental margin gains versus competitors, particularly as higher margin EV and alt fuel products become a greater share of sales, positively impacting gross margins and owner loyalty.

Read the complete narrative.

Want to see how modest revenue assumptions can still drive a sizable valuation gap, thanks to rising margins and a surprisingly restrained future earnings multiple? Read on.

Result: Fair Value of $63.75 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this upside depends on sustained government incentives and smooth execution. Any funding cuts or implementation setbacks could potentially temper the margin expansion story.

Find out about the key risks to this Blue Bird narrative.

Build Your Own Blue Bird Narrative

If you are not aligned with this view, or you prefer to dig into the numbers yourself, you can quickly craft your own perspective in under three minutes: Do it your way.

A good starting point is our analysis highlighting 5 key rewards investors are optimistic about regarding Blue Bird.

Looking for more investment ideas?

Do not stop with a single opportunity, sharpen your edge and uncover more stocks that match your strategy using the Simply Wall St screener right now.

• Target powerful growth potential by scanning these 27 AI penny stocks at the forefront of intelligent automation and data driven disruption.
• Lock in income focused opportunities with these 15 dividend stocks with yields > 3%, highlighting businesses that share more of their profits with shareholders.
• Capitalize on mispriced opportunities using these 905 undervalued stocks based on cash flows to spot companies where cash flows suggest the market is still catching up.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com