Interesting Value Stock Blue Bird Corp (BLBD): A Buy in 2024? BLD Stock Analysis and Price Forecast

Today, I've got a stock to share that might catch your interest due to its potential value or maybe because it's fairly valued. It's part of my routine to screen daily between 5 to 10 stocks, and occasionally, I stumble upon ones that merit a deeper dive. Blue Bird Corporation (BLBD) stock has caught my eye, and though I haven't bought in just yet, I'm keenly watching it. I'll explain why it could be an attractive investment opportunity.

About Blue Bird Corporation Stock

Blue Bird Corporation (BLBD) stock is in the business of making school buses, including electric and propane buses, alongside their traditional models. It's worth noting that they're slated to report their fiscal earnings for 2024 on February 7. Additionally, they've announced a $16 million stock buyback program, which is significant given their market cap of around $1 billion. While their business model of manufacturing school buses might not seem scalable or unique, the foray into electric vehicles marks an interesting growth avenue, albeit still a small fraction of their overall business.

It's important to approach the information provided by the company with caution. The past couple of years have been challenging for Bluebird, with 2021 and 2022 marking particularly rough periods. However, there's a silver lining with a strong backlog of orders, especially for their electric vehicles, indicating potential growth. Yet, interpreting this information requires a discerning eye, especially if you’re considering a long-term investment.

A key point that piqued my interest was the impact of steel prices on the company's operations. Fluctuating steel prices could significantly affect their earnings, offering a unique angle to consider when evaluating Bluebird's investment potential. The company has also raised its guidance for 2024, projecting net revenues above $1.2 billion and an adjusted free cash flow between $60 to $70 million, presenting a potentially positive outlook.

Blue Bird (BLBD) stock buy or not to buy?

If I were to invest in Bluebird, it would be based on short-term valuation assessments, re-evaluating every quarter or six months to determine if it remains a value play. In terms of valuation, Bluebird is graded 'B minus' by Seeking Alpha, with a current P/E ratio around 17, which is reasonably attractive. Their price to sales ratio is expected to be below one, another positive sign, though their price to book ratio is notably high at 24, warranting further investigation.

Bluebird's financials show promise with an expected revenue growth of around 20% for the next year and a long-term EPS growth rate of 15%. However, their working capital growth doesn't mirror this positivity. Their profitability metrics are high, driven by an unusually high return on common equity, which might skew a realistic assessment of their financial health.

Their balance sheet and cash flow statements reveal a solid cash position and a decreasing long-term debt, indicating prudent financial management. The key to making a well-timed investment in Bluebird would have been at the start of 2020, but it's crucial to determine if there's still value to be had or if we're too late to the party.

A look at insider transactions shows significant sales, which could be a red flag for potential investors. However, it's also notable that the CEO and other board members hold substantial shares, suggesting a vested interest in the company's long-term success.

Blue Bird (BLBD) stock analysis and conclusion

In summary, while Blue Bird Corporation (BLBD) stock has shown some positive signs, its current valuation suggests it might have risen too much to be considered a strong buy at this moment. However, it's worth keeping an eye on, especially if the price were to adjust to a more attractive entry point based on technical analysis or other valuation metrics.

The decision to invest in Bluebird will hinge on how it navigates its challenges and leverages its growth opportunities. For now, I'll continue to monitor its progress and reevaluate its investment potential based on future performance and market conditions. Stay tuned to Business Investors for more insights into stocks worth watching, investing tips, and all things business. Until next time, happy investing!