BLUE BIRD CORP (NASDAQ:BLBD) – A GARP Candidate Worth Watching

BLUE BIRD CORP (NASDAQ:BLBD) emerged from our Peter Lynch-inspired stock screen as a potential candidate for long-term investors seeking growth at a reasonable price (GARP). 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 financial health.

Why BLBD Fits the GARP Approach

• Strong Earnings Growth: BLBD has delivered a 5-year average EPS growth of 16.38%, aligning with Peter Lynch’s preference for steady but sustainable expansion. Recent yearly EPS growth of 22.76% further supports its momentum.
• Attractive Valuation: With a PEG ratio of 0.77 (below Lynch’s threshold of 1), the stock appears reasonably priced relative to its growth. Its P/E ratio of 12.63 is also well below both industry and S&P 500 averages.
• Healthy Profitability: The company’s Return on Equity (ROE) stands at 56.80%, significantly outperforming most peers in the machinery industry. Its Return on Invested Capital (ROIC) of 28.98% further underscores efficient capital allocation.
• Solid Financial Health: BLBD maintains a Debt/Equity ratio of 0.46, indicating a balanced capital structure. While its current ratio of 1.45 is adequate, investors should note its lower quick ratio (0.73), which suggests tighter liquidity.

Fundamental Snapshot

Our fundamental analysis report assigns BLBD a rating of 6/10, highlighting its strengths in profitability and valuation while noting mixed liquidity metrics. Key takeaways:

• Profitability: High ROE and ROIC, with improving margins.
• Valuation: Priced below industry averages, with a favorable PEG ratio.
• Growth: Steady historical EPS growth, though future projections suggest moderation.

For investors following a GARP strategy, BLBD presents an interesting case—combining growth, reasonable pricing, and a niche market position in sustainable transportation.

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

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should always conduct your own analysis before making investment decisions.