BLUE BIRD CORP (NASDAQ:BLBD) – A GARP Candidate in the School Bus Industry

BLUE BIRD CORP (NASDAQ:BLBD) surfaced in our Peter Lynch-inspired stock screen, presenting a compelling case for long-term investors seeking growth at a reasonable price. The company, a manufacturer of school buses with a focus on low- and zero-emission vehicles, meets several key criteria for sustainable growth and sound valuation.

Why BLBD Fits the GARP Approach

• Earnings Growth: BLBD has delivered a 5-year average EPS growth of 16.38%, aligning with Lynch’s preference for sustainable but not excessive growth (15-30% range).
• Attractive Valuation: With a PEG ratio of 0.72 (below 1), the stock appears reasonably priced relative to its growth trajectory.
• Strong Profitability: The company boasts an impressive Return on Equity (ROE) of 56.80%, well above Lynch’s 15% threshold, indicating efficient use of shareholder capital.
• Healthy Balance Sheet: A Debt/Equity ratio of 0.46 suggests prudent financial management, though Lynch might prefer an even lower figure.
• Liquidity: The Current Ratio of 1.45 indicates sufficient short-term financial stability.

Fundamental Snapshot

BLBD’s financial health scores a 6/10 in our analysis, with strengths in profitability and valuation but mixed results in liquidity. Key highlights:

• Valuation: P/E of 11.75 and Forward P/E of 9.86 suggest the stock is cheaper than most peers.
• Margins: Operating margins have improved, though gross margins lag behind industry averages.
• Growth: Revenue and EPS growth are steady, with future projections pointing to modest but consistent expansion.

For a deeper dive, review the full fundamental analysis of BLBD.

Our Peter Lynch Strategy screener lists more stocks matching these criteria and is updated regularly.

Disclaimer

This is not investing advice. The observations here are based on current data, but investors should conduct their own research before making decisions.