On Thursday, Blue Bird Corp (NASDAQ:BLBD) shares, a leading school bus manufacturer, received a positive outlook from Roth/MKM, with the firm raising its price target to $43.00 from $40.00. The firm has maintained a Buy rating for the stock, indicating confidence in its performance.
The upgrade follows a strong financial report from Blue Bird, which surpassed expectations with its recent earnings. The company's revenue exceeded Roth/MKM's model by $31 million, which in turn led to EBITDA and EPS figures that were $12.3 million and $0.49 higher than anticipated, respectively.
In addition to the robust earnings, Blue Bird has adjusted its financial guidance for the fiscal year 2024. The company has increased its revenue guidance midpoint by $100 million, and the EBITDA outlook midpoint by $25 million. This revised guidance reflects a positive trajectory for the company's financial performance in the upcoming year.
Despite the overall positive results, there was a noted decrease in gross margins, which declined by 160 basis points quarter over quarter. However, management has indicated that the entire backlog of orders now reflects the current pricing, which may stabilize margins going forward.
Roth/MKM's decision to raise estimates is influenced by the anticipation of continued Electric School Bus (EVS) bookings, which are expected to be supported by federal funding programs. The firm recognizes the positive business momentum Blue Bird is experiencing and is adjusting its outlook to reflect this optimism.
InvestingPro Insights
Following the upbeat assessment by Roth/MKM, the latest metrics from InvestingPro reinforce the positive outlook for Blue Bird Corp (NASDAQ:BLBD). With a market capitalization of $1.21 billion, the company demonstrates a healthy size in its sector. The adjusted P/E ratio stands at a reasonable 19.34, which is in line with industry standards and suggests a balanced valuation relative to earnings. Furthermore, Blue Bird's revenue growth is notably robust, with a significant increase of 33.91% over the last twelve months as of Q1 2024, which may signal strong operational performance and market demand for their products.
InvestingPro Tips highlight the company's potential for income growth, with net income expected to rise this year. Additionally, the company has shown a strong return over the last three months, with a 22.88% total price return, indicating a positive trend in investor sentiment. With these factors in mind, the company's financial health appears to be on a solid footing.
For readers interested in a deeper analysis, InvestingPro offers a suite of additional tips to further inform investment decisions. There are 12 more InvestingPro Tips available for Blue Bird Corp, which can be accessed at https://www.investing.com/pro/BLBD. To enhance your investing toolkit, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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