Earnings Beat: Blue Bird Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Blue Bird Corporation (NASDAQ:BLBD) investors will be delighted, with the company turning in some strong numbers with its latest results. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 15% higher than the analysts had forecast, at US$318m, while EPS were US$0.81 beating analyst models by 134%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Blue Bird after the latest results.

View our latest analysis for Blue Bird

Following the latest results, Blue Bird's five analysts are now forecasting revenues of US$1.25b in 2024. This would be an okay 3.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 8.2% to US$2.06. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.23b and earnings per share (EPS) of US$1.81 in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a nice increase in earnings per share in particular.

It will come as no surprise to learn that the analysts have increased their price target for Blue Bird 23% to US$37.25on the back of these upgrades. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Blue Bird analyst has a price target of US$44.00 per share, while the most pessimistic values it at US$34.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Blue Bird is forecast to grow faster in the future than it has in the past, with revenues expected to display 4.3% annualised growth until the end of 2024. If achieved, this would be a much better result than the 0.08% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 3.1% per year. So it looks like Blue Bird is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Blue Bird's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Blue Bird going out to 2025, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Blue Bird that you should be aware of.

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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.