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Blue Bird Is An Undervalued Electric Vehicle Manufacturer Going Back To School With $100 Billion Of Federal Contracts In Its Grasp

Feb. 23, 2021 10:00 AM ETBlue Bird Corporation (BLBD)21 Comments
White Diamond Research profile picture
White Diamond Research


  • Blue Bird Corp. is the leading school bus manufacturer in the US that has developed an electric vehicle solution already available for large scale commercialization.
  • With schools about to open up again, BLBD will face an explosion of pent-up demand for electric school buses.
  • BLBD is significantly undervalued relative to EV peers and even more so as a reopening play.
  • Biden's 500,000 electric school buses in five years plan is a great opportunity for BLBD's school bus niche.
  • We think a narrative shift comparable to the contract that moved Workhorse's valuation to $4B+ could move BLBD multiples higher.

Blue Bird Corp. (NASDAQ:BLBD) is an undiscovered powerhouse in the electric vehicle (EV) space. We believe it's the best EV value in the market today, and is set to dominate the upcoming EV school bus manufacturing explosion. BLBD is the leading independent designer and manufacturer of school buses in the United States, with over 150,000 buses in operation today. BLBD is also the market leader in alternative fuel applications with its propane powered, electric, and compressed natural gas-powered school buses. We view BLBD as the immediate front runner to capitalize on the school bus electrification plans of the Biden Administration. With child safety of the utmost importance, we believe BLBD's decades of experience in manufacturing buses and its extensive relationships with school boards, give it a powerful edge against competitors.

Blue Bird Is Valued Way Below Its Electric School Bus Peers

The following table shows BLBD's valuation relative to electric school bus peers and Workhorse, a key benchmark for valuing federal electrification potential.

Source: SEC filings

On a revenue multiple, BLBD is significantly undervalued relative to peers. The three noted electric school bus peers are valued on future revenue and largely unproven business models. Unlike its peers, BLBD has a proven fleet of reliable vehicles, along-side electric buses already being commercialized. As opposed to speculating on growth in future years, we suggest investing in BLBD, which is not only profitable, but already controls 77% of the EV market.

To date, BLBD is and remains the #1 electric school bus manufacturer in the US. On 12/9/20, BLBD announced it had delivered its 300th electric school bus, more than every other company combined. As noted on page 8 of BLBD's 7/21/20 investor presentation, an electric school bus currently costs $350K vs. $100K for its diesel fueled one. Although the 3.5x premium appears pricey, the operational

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White Diamond Research profile picture
We provide deep research and valuable information on small cap stocks to hedge funds and high net worth individuals. We specialize in the technology and healthcare sectors. We have an over 80% success rate, see our reports at whitediamondresearch.com. See the 3rd party verified return on each of our bearish reports over the last 24 months at: https://breakoutpoint.com/as-summary/white-diamond-gvmtg/To inquire about becoming a premium subscriber, send a PM here or email us at research@whitediamondresearch.com.Follow us on twitter @whiteresearch.

Analyst’s Disclosure: I am/we are long BLBD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (21)

yoipitydafool profile picture
Too expensive if it drops to $20.00 share I'll buy...
@White Diamond Research
Are you aware of any news that would account for the large price drop in BLBD today?
Northern Reflections on Value profile picture
@bargains There was some selling by a large private equity holder — maybe the disclosure helped prompt the price drop.



(But the filing time on the Form 4 appears to be 10:32am today, just after the drop, so it’s not clear)
@Northern Reflections on Value
Thank you for this. They sold 1.5 million shares at $25.9, way below yesterday's close. I think this had two effects: (a) technically-oriented traders took this as a large weakness and sold, plus (b) fundamentally-oriented holders took this as a sign that BLBD might have some negatives.

My take is that the 1.5 million share sale could have been motivated by any of several unrelated factors; e.g., need to deploy funds elsewhere.

In any case, I added to my holding (which already was sizeable) and believe the stock will recover over the coming days -- I hope!
bazooooka profile picture
@bargains Likely just profit taking. Lots of spacs and despacs were way up and now they are coming back; even older ones like this that has near tripled from last Summer.
bazooooka profile picture
A former Spac that has done well this year. I like this one and LAZY.
wetdoginvest profile picture
Does anyone understand why $BLBD does not have options?
Forsitan profile picture
Nice idea. Can you please comment more on the competitive landscape? There are several names out there. Do you think they will have to massively increase CAPEX?
ESGFIRE profile picture
Very well written article by you @White Diamond Research Please check your direct messages on twitter.
Northern Reflections on Value profile picture
A good case in point of an incumbent that isn’t going to get swept aside just because some “disruptive innovation” (EVs) popped up!

If the Biden plan for school buses can be pulled off, the timeline (5 years) sounds much more radical than anything I can picture happening with all of the cars and trucks out there.
Courage & Conviction Investing profile picture
Great call, White Diamond. Me and my subscribers did well on this one as I alerted them to your compelling write up (yesterday at $21.40 per share). Thanks for sharing!
White Diamond Research profile picture
Great, glad to hear. Kudos to you for taking the time to find this opportunity and having the insight to jump on it!
Good call!!
I should have gone with 100K instead og 10K....

Thanks for a very interesting investment thesis. Took advantage of today's downdraft to initiate a modest position.

White Diamond Research profile picture

@Bill in Austin Good job. And if you guys all saw what happened to WKHS today, as we compare them in this report, BLBD is the real Workhorse!


@White Diamond Research Ouch. Now that was a haircut-and-a-half.


Thanks for your article @ White Diamond. I agree with your thesis but just a clarification. While the Biden Administration may be providing money to buy electric buses, the decisions will be down to the local school districts. That is why competitors who make decent electric buses (eg BYD), need to either acquire or partner with BLBD. These buses are sold local district by local district, in late night meetings of school boards, based on both quantitative and qualitative factors. BLBD's built in America, long operating history, and deep personal relations with local purchasers will be key factors in winning this marketplace battle.

haoleboy1967 profile picture
@Sound Investor I think you are correct. Also when it comes to purchasing for government agencies and schools the devil is in the details with the specifications for the bid. If whomever writes the specs lays out the specs for BlueBird then no one else can bid apples to apples. Yes they buy on price but there is no flexibility to re-write the specs once the sealed bid is let out. I would think BlueBird already has relationships with enough people to get the specs written for their bus. i am waiting for an entry point and go long here. But I dont know if it will drop back where I want to get in ....
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