Intrinsic value of Blue Bird - BLBD

Previous Close

$19.36

  Intrinsic Value

$6.79

stock screener

  Rating & Target

str. sell

-65%

Previous close

$19.36

 
Intrinsic value

$6.79

 
Up/down potential

-65%

 
Rating

str. sell

We calculate the intrinsic value of BLBD stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  1,010
  1,034
  1,060
  1,090
  1,123
  1,159
  1,199
  1,242
  1,288
  1,337
  1,390
  1,446
  1,506
  1,570
  1,638
  1,710
  1,786
  1,866
  1,951
  2,041
  2,135
  2,235
  2,340
  2,451
  2,568
  2,690
  2,820
  2,956
  3,099
  3,249
Variable operating expenses, $m
  525
  537
  551
  566
  583
  602
  622
  644
  667
  693
  712
  741
  772
  804
  839
  876
  915
  956
  999
  1,045
  1,094
  1,145
  1,199
  1,256
  1,315
  1,378
  1,445
  1,514
  1,588
  1,665
Fixed operating expenses, $m
  438
  448
  458
  468
  478
  489
  500
  511
  522
  533
  545
  557
  569
  582
  595
  608
  621
  635
  649
  663
  678
  692
  708
  723
  739
  755
  772
  789
  806
  824
Total operating expenses, $m
  963
  985
  1,009
  1,034
  1,061
  1,091
  1,122
  1,155
  1,189
  1,226
  1,257
  1,298
  1,341
  1,386
  1,434
  1,484
  1,536
  1,591
  1,648
  1,708
  1,772
  1,837
  1,907
  1,979
  2,054
  2,133
  2,217
  2,303
  2,394
  2,489
Operating income, $m
  47
  48
  51
  56
  62
  69
  77
  87
  99
  111
  133
  148
  165
  184
  204
  226
  250
  275
  303
  332
  364
  398
  434
  472
  513
  557
  603
  653
  705
  761
EBITDA, $m
  60
  62
  65
  69
  75
  83
  92
  102
  113
  126
  140
  156
  173
  192
  213
  235
  259
  285
  313
  343
  375
  410
  446
  485
  527
  571
  618
  668
  722
  778
Interest expense (income), $m
  0
  8
  4
  4
  4
  5
  5
  6
  6
  7
  8
  8
  9
  10
  11
  12
  13
  14
  15
  16
  17
  19
  20
  21
  23
  25
  26
  28
  30
  32
  34
Earnings before tax, $m
  39
  45
  47
  52
  57
  64
  72
  81
  91
  103
  124
  139
  155
  173
  192
  213
  236
  260
  287
  315
  345
  378
  412
  449
  488
  530
  575
  623
  673
  727
Tax expense, $m
  10
  12
  13
  14
  15
  17
  19
  22
  25
  28
  34
  38
  42
  47
  52
  58
  64
  70
  77
  85
  93
  102
  111
  121
  132
  143
  155
  168
  182
  196
Net income, $m
  28
  33
  35
  38
  42
  46
  52
  59
  67
  76
  91
  102
  113
  126
  140
  156
  172
  190
  209
  230
  252
  276
  301
  328
  357
  387
  420
  454
  491
  530

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  302
  309
  316
  325
  335
  346
  358
  371
  384
  399
  415
  432
  450
  469
  489
  510
  533
  557
  582
  609
  637
  667
  699
  732
  766
  803
  842
  882
  925
  970
Adjusted assets (=assets-cash), $m
  302
  309
  316
  325
  335
  346
  358
  371
  384
  399
  415
  432
  450
  469
  489
  510
  533
  557
  582
  609
  637
  667
  699
  732
  766
  803
  842
  882
  925
  970
Revenue / Adjusted assets
  3.344
  3.346
  3.354
  3.354
  3.352
  3.350
  3.349
  3.348
  3.354
  3.351
  3.349
  3.347
  3.347
  3.348
  3.350
  3.353
  3.351
  3.350
  3.352
  3.351
  3.352
  3.351
  3.348
  3.348
  3.352
  3.350
  3.349
  3.351
  3.350
  3.349
Average production assets, $m
  74
  75
  77
  80
  82
  85
  88
  91
  94
  98
  101
  106
  110
  115
  120
  125
  130
  136
  142
  149
  156
  163
  171
  179
  187
  196
  206
  216
  226
  237
Working capital, $m
  -33
  -34
  -35
  -36
  -37
  -38
  -40
  -41
  -42
  -44
  -46
  -48
  -50
  -52
  -54
  -56
  -59
  -62
  -64
  -67
  -70
  -74
  -77
  -81
  -85
  -89
  -93
  -98
  -102
  -107
Total debt, $m
  68
  75
  82
  90
  99
  108
  119
  130
  143
  156
  170
  185
  202
  219
  237
  256
  277
  298
  321
  345
  371
  397
  426
  455
  487
  520
  554
  591
  629
  670
Total liabilities, $m
  271
  278
  285
  293
  302
  311
  322
  334
  346
  359
  373
  389
  405
  422
  440
  459
  480
  501
  524
  548
  574
  600
  629
  658
  690
  723
  758
  794
  833
  873
Total equity, $m
  30
  31
  32
  33
  34
  35
  36
  37
  38
  40
  41
  43
  45
  47
  49
  51
  53
  56
  58
  61
  64
  67
  70
  73
  77
  80
  84
  88
  93
  97
Total liabilities and equity, $m
  301
  309
  317
  326
  336
  346
  358
  371
  384
  399
  414
  432
  450
  469
  489
  510
  533
  557
  582
  609
  638
  667
  699
  731
  767
  803
  842
  882
  926
  970
Debt-to-equity ratio
  2.270
  2.420
  2.580
  2.760
  2.940
  3.130
  3.320
  3.520
  3.720
  3.910
  4.100
  4.300
  4.480
  4.670
  4.850
  5.020
  5.190
  5.350
  5.510
  5.670
  5.810
  5.960
  6.090
  6.220
  6.350
  6.470
  6.590
  6.700
  6.800
  6.910
Adjusted equity ratio
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  28
  33
  35
  38
  42
  46
  52
  59
  67
  76
  91
  102
  113
  126
  140
  156
  172
  190
  209
  230
  252
  276
  301
  328
  357
  387
  420
  454
  491
  530
Depreciation, amort., depletion, $m
  13
  13
  13
  13
  14
  14
  14
  14
  15
  15
  7
  8
  8
  8
  9
  9
  10
  10
  10
  11
  11
  12
  13
  13
  14
  14
  15
  16
  17
  17
Funds from operations, $m
  41
  46
  48
  51
  55
  60
  66
  73
  81
  90
  98
  109
  122
  135
  149
  165
  182
  200
  220
  241
  263
  288
  313
  341
  370
  402
  435
  470
  508
  548
Change in working capital, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
Cash from operations, $m
  42
  47
  49
  52
  56
  61
  68
  75
  83
  92
  100
  111
  123
  137
  151
  167
  184
  203
  223
  244
  267
  291
  317
  345
  374
  406
  439
  475
  513
  553
Maintenance CAPEX, $m
  -5
  -5
  -6
  -6
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -17
New CAPEX, $m
  -1
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
Cash from investing activities, $m
  -6
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -11
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -16
  -17
  -18
  -18
  -20
  -21
  -22
  -23
  -23
  -25
  -26
  -28
Free cash flow, $m
  35
  39
  41
  44
  48
  53
  59
  65
  73
  81
  89
  100
  111
  124
  138
  153
  170
  187
  206
  227
  249
  272
  297
  324
  353
  383
  415
  450
  486
  525
Issuance/(repayment) of debt, $m
  -83
  6
  7
  8
  9
  10
  11
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  22
  23
  24
  25
  27
  28
  30
  31
  33
  35
  37
  38
  40
Issuance/(repurchase) of shares, $m
  61
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -22
  6
  7
  8
  9
  10
  11
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  22
  23
  24
  25
  27
  28
  30
  31
  33
  35
  37
  38
  40
Total cash flow (excl. dividends), $m
  13
  46
  49
  52
  57
  63
  69
  77
  85
  95
  103
  115
  127
  141
  156
  173
  190
  209
  229
  251
  274
  299
  325
  354
  384
  416
  450
  486
  525
  566
Retained Cash Flow (-), $m
  -89
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -76
  45
  48
  51
  56
  61
  68
  75
  84
  93
  102
  113
  126
  139
  154
  170
  188
  207
  227
  248
  271
  296
  322
  350
  380
  412
  446
  482
  521
  561
Discount rate, %
  8.70
  9.14
  9.59
  10.07
  10.57
  11.10
  11.66
  12.24
  12.85
  13.50
  14.17
  14.88
  15.62
  16.41
  17.23
  18.09
  18.99
  19.94
  20.94
  21.98
  23.08
  24.24
  25.45
  26.72
  28.06
  29.46
  30.93
  32.48
  34.11
  35.81
PV of cash for distribution, $m
  -69
  38
  36
  35
  34
  33
  31
  30
  28
  26
  24
  21
  19
  17
  14
  12
  10
  8
  6
  5
  3
  2
  2
  1
  1
  1
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0

Blue Bird Corporation designs, engineers, manufactures, and sells school buses and aftermarket parts in the United States, Canada, and internationally. It offers Type C, Type D, and specialty buses, as well as Sigma, a bus for public transportation. The company sells its products through a network of dealers, as well as directly to fleet operators, the United States government, and state governments. It also distributes aftermarket parts of various makes. The company was founded in 1927 and is headquartered in Fort Valley, Georgia.

FINANCIAL RATIOS  of  Blue Bird (BLBD)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

BLBD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BLBD stock intrinsic value calculation we used $990.602 million for the last fiscal year's total revenue generated by Blue Bird. The default revenue input number comes from 0001 income statement of Blue Bird. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our BLBD stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 8.7%, whose default value for BLBD is calculated based on our internal credit rating of Blue Bird, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Blue Bird.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of BLBD stock the variable cost ratio is equal to 52%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $429 million in the base year in the intrinsic value calculation for BLBD stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Blue Bird.

Corporate tax rate of 27% is the nominal tax rate for Blue Bird. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the BLBD stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for BLBD are equal to 7.3%.

Life of production assets of 13.6 years is the average useful life of capital assets used in Blue Bird operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for BLBD is equal to -3.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $-58.51 million for Blue Bird - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 27.111 million for Blue Bird is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Blue Bird at the current share price and the inputted number of shares is $0.5 billion.

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COMPANY NEWS

▶ Blue Bird: Fiscal 3Q Earnings Snapshot   [Aug-08-18 04:40PM  Associated Press]
▶ Blue Bird: Fiscal 2Q Earnings Snapshot   [04:11PM  Associated Press]
▶ Blue Bird Sells Its 2,500th Gasoline-Powered School Bus   [Apr-10-18 04:21PM  Business Wire]
▶ New State-of-the-Art Blue Bird Dealership in Missouri   [Mar-28-18 03:55PM  Business Wire]
▶ Blue Bird reports 1Q loss   [07:53AM  Associated Press]
▶ ETFs with exposure to Blue Bird Corp. : December 29, 2017   [Dec-29-17 11:35AM  Capital Cube]
▶ ETFs with exposure to Blue Bird Corp. : December 13, 2017   [Dec-13-17 12:50PM  Capital Cube]
▶ Blue Bird misses 4Q profit forecasts   [Dec-06-17 04:21PM  Associated Press]
▶ New Blue Bird Dealership in Virginia   [Oct-24-17 02:00PM  Business Wire]
▶ Blue Bird tops Street 3Q forecasts   [Aug-04-17 02:34AM  Associated Press]
▶ ADOMANI and Blue Bird Introduce All-New Electric School Bus   [Jul-13-17 11:57PM  GlobeNewswire]
▶ Blue Bird Introduces All-New Electric School Bus Solutions   [Jul-11-17 02:30PM  Business Wire]
▶ ETFs with exposure to Blue Bird Corp. : July 7, 2017   [Jul-07-17 02:36PM  Capital Cube]
▶ ETFs with exposure to Blue Bird Corp. : June 26, 2017   [Jun-26-17 03:25PM  Capital Cube]
▶ Blue Bird misses 2Q profit forecasts   [May-11-17 05:50PM  Associated Press]
▶ Ride-hailing regulations in Indonesia   [Mar-21-17 01:59AM  CNBC Videos]
▶ [$$] Deal Close Announcements: Feb. 27-March 3   [Mar-03-17 06:32PM  The Wall Street Journal]
▶ [$$] Deal Close Announcements: Feb. 27-March 3   [06:32PM  at The Wall Street Journal]
▶ Georgia company wins $4.4M DOE contract to develop electric school bus   [04:35PM  American City Business Journals]
▶ Blue Bird reports 1Q loss   [Feb-09-17 04:10PM  Associated Press]

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