Is BLBD Stock a Buy on Q1 Earnings Beat & Rising EPS Estimates?

Core Viewpoint - Blue Bird Corporation (BLBD) reported better-than-expected first-quarter fiscal 2025 earnings and maintained its revenue and adjusted EBITDA guidance for fiscal 2025 [1] Demand and Market Position - Demand for school buses remains strong, prompting Wall Street analysts to increase their earnings estimates for Blue Bird over the past week [2] - Blue Bird has established itself as a leader in alternative fuel and electric-powered buses, with competitors ceasing to offer propane or gasoline-powered models, positioning Blue Bird as the sole OEM for these products [4] Financial Performance - Blue Bird exited the first quarter of fiscal 2025 with a backlog of 4,400 buses, representing approximately six months of production, and reported a backlog of over 4,700 buses valued at $760 million [5] - The company generated a net profit of $28.7 million in the last reported quarter, a significant improvement from an $11 million loss in the same quarter two years ago [7] - Blue Bird expects fiscal 2025 revenues between $1.4 billion and $1.5 billion, an increase from $1.35 billion in 2024, and aims to sell 9,250 buses in fiscal 2025, including around 1,000 electric buses [8] Operational Improvements - Blue Bird has successfully completed an operational turnaround initiated in late 2021, which has led to improved profitability and a strengthened balance sheet, ending the first quarter of fiscal 2025 with $280 million in liquidity [6][7] Government Policy and Risks - The Trump administration's policies pose uncertainties for electric vehicle incentives, with about 25% of Blue Bird's EV backlog linked to delayed EPA rebate approvals [9] - A memo from the EPA indicates that federal funding for the Clean School Bus Program should resume soon, allowing Blue Bird to fulfill pending EV bus orders [10] - Blue Bird secured an $80 million contract from the Department of Energy to fund half of its $160 million plant expansion, which is expected to resume once policy reviews are completed [11] Analyst Sentiment - Wall Street analysts are optimistic about Blue Bird, with five out of seven analysts rating it a "Strong Buy" and an average price target suggesting a 46% upside from current levels [13]