Blue Bird Corporation

In this pitch deck, analysts Nika Lundh and William Beer present the investment
case for Blue Bird Corporation. The leading U.S school-bus OEM has completed a
full operational turnaround and emerged as the dominant provider of alternative-fuel
buses. Despite structurally higher margins and strong cash generation, the market
continues to view Blue Bird through an outdated EV-subsidy narrative. Elevated
short interest and concerns about overearning have created a valuation disconnect,
as investors underestimate the durability of earnings driven by core segments. As
margins remain intact and the market reassesses Blue Bird’s true earnings power,
the current mispricing should correct, implying a 51% upside

Investment Thesis
● Misinterpreted segment dynamics: EV buses contribute a minority of
volumes and gross profit, while over 80% of gross profit is generated by core
segments, which are supported by state-level incentives and cost advantages
● Structural turnaround drives sustainable margins: Following production
simplification and efficiency gains, gross margins have reset to around 20%,
compared to a roughly 13% 5Y-average
● Shorts are misreading the earnings profile: The bear case assumes
margins are driven by temporary price spikes and EV funding. In reality,
margin expansion reflects durable operational gains and normalized
production economics