Blue Bird (BLBD) Stock Moves Above 50-Day SMA: Time to Buy?

Technical Analysis - The stock of Blue Bird Corporation (BLBD) has reached a significant support level, breaking through its 50-day simple moving average (SMA), indicating a potential short-term bullish trend [1][7] - The 50-day SMA is a key indicator for identifying support and resistance levels, and Blue Bird's movement above this mark suggests a positive shift [7][8] Expansion & Safety Initiatives - The company plans to double capital expenditure to expand manufacturing capacity, aiming to produce 50 new buses per day to meet rising demand [4] - Blue Bird is prioritizing enhancements in bus safety features, investing in supply chain capabilities, and modernizing production facilities [4] Financial Performance & Guidance - Blue Bird raised its FY24 revenue guidance to $1.27-$1.32 billion, up from the previous range of $1.15-$1.25 billion, and expects adjusted EBITDA between $145 million and $165 million, higher than the prior projection of $120-$140 million [5] - The company reported a profit of $26 million in the last quarter, a significant improvement from a loss of $11 million in the first quarter of fiscal 2023 [13] Market Opportunity & Competitive Advantage - Blue Bird has a massive market opportunity with over 90% of U.S. school buses still diesel-powered, and the company is well-positioned to benefit from the growing demand for electric school buses [9] - The company has an exclusive partnership with Ford and Roush CleanTech, deploying over 30,000 propane and gasoline systems, reinforcing its dominant position in the alternative fuel market [10] Government & Regulatory Support - Favorable government policies, such as the EPA's Clean School Bus Program and state-level incentives, are accelerating the adoption of electric buses and supporting Blue Bird's market expansion [11] Turnaround & Growth Strategy - Blue Bird's turnaround strategy, implemented in late 2021, has proven effective, leading to expanded profit margins and leveraging the growing demand for EV buses [12][13] - The company has an order backlog of approximately 5,900 units valued at around $850 million, with nearly 500 electric orders in its backlog as of the second quarter of fiscal 2024 [22] Stock Performance & Valuation - Year-to-date, shares of Blue Bird have rallied roughly 94%, outperforming the industry, sector, and S&P 500 [14] - The stock is trading at a forward 12-month sales multiple of 1.15, higher than its 5-year median but lower than the industry's 1.53, with a Value Score of B [21] Earnings Growth & Revision Trends - The Zacks Consensus Estimate for fiscal 2024 EPS implies a year-over-year uptick of 155%, with a bullish estimate revision trend for the current fiscal year, up 90.9% to $2.73 per share over the last year [17] Investor Considerations - Existing shareholders are advised to hold onto the stock, while new investors may consider adding BLBD to their watchlist and initiating positions during market dips [19] - Despite reliance on subsidies and grants, the company's improved financial performance, manageable debt, and strategic alignment with market demands suggest a positive outlook [24]