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]