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Blue Bird Corp. is the best performing EV stock so far this year.
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The bus maker has seen a boom in its electric bus business thanks to a $5 billion government program.
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Electric school buses can cost more than $300,000, compared to $100,000 for traditional buses.
The top-performing electric vehicle stock is a little-known school bus maker.
Blue Bird Corp.whose market capitalization is around $2 billion, has begun diversifying from its diesel and gasoline buses to electric, boosted by government funding.
Blue Bird shares have surged 116% year to date, far outpacing other electric vehicle stocks, which are mostly down this year, including You’re here, Rivien, Lucidand a large number of Chinese electric vehicle companies.
In its second-quarter earnings report released last month, Blue Bird said its revenue rose 15% year over year to $346 million, beating analysts’ estimates of nearly $50 million. dollars, while its profits more than tripled to $0.89 per share.
The school bus maker sold a record 210 electric school buses during the quarter and said it has an order backlog of around 500 electric buses, with bookings up 56% from last year .
The United States Environmental Protection Agency’s Clean School Bus Program, which was established in The Bipartisan Infrastructure Act of 2021 and provides $5 billion in funding to replace diesel school buses with electrified buses.
Electric school buses now represent 9% of Blue Bird’s revenue, up from 6% last year, and are expected to increase as funding for the EPA’s electric school bus program continues to flow to districts seeking to modernize their fleet.
One of the big benefits for Blue Bird is that electric school buses will significantly increase its average selling price and profit margins on the vehicles it produces.
According to a Barclays study, an electric school bus can sell for more than $300,000, compared to just $100,000 for traditional school buses.
“This is a completely different revenue and gross margin structure for Blue Bird buses than just a year ago, with bus prices up significantly,” said Phil Horlock, CEO of Blue Bird, during the company’s latest earnings conference call.
Needham said in a note last month that he expects growth in Blue Bird’s EV business to continue.
“EV school bus growth is in its early stages. We anticipate continued strong demand as school districts compete for essentially free buses, with higher and known ASPs over a multi-year period, this which will allow BLBD and its industry peers to reduce costs before market prices take over,” said Needham analyst Chris Pierce.
Needham rates Blue Bird a “Buy” with a price target of $52.
Read the original article on Business Insider
