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Strong week for Blue Bird (NASDAQ:BLBD) shareholders doesn't alleviate pain of three-year loss

It is doubtless a positive to see that the Blue Bird Corporation (NASDAQ:BLBD) share price has gained some 41% in the last three months. But that cannot eclipse the less-than-impressive returns over the last three years. After all, the share price is down 45% in the last three years, significantly under-performing the market.

On a more encouraging note the company has added US$77m to its market cap in just the last 7 days, so let's see if we can determine what's driven the three-year loss for shareholders.

See our latest analysis for Blue Bird

Blue Bird wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last three years Blue Bird saw its revenue shrink by 14% per year. That is not a good result. The stock has disappointed holders over the last three years, falling 13%, annualized. And with no profits, and weak revenue, are you surprised? However, in this kind of situation you can sometimes find opportunity, where sentiment is negative but the company is actually making good progress.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
earnings-and-revenue-growth

If you are thinking of buying or selling Blue Bird stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While it's never nice to take a loss, Blue Bird shareholders can take comfort that their trailing twelve month loss of 16% wasn't as bad as the market loss of around 18%. Unfortunately, last year's performance may indicate unresolved challenges, given that it's worse than the annualised loss of 6% over the last half decade. While some investors do well specializing in buying companies that are struggling (but nonetheless undervalued), don't forget that Buffett said that 'turnarounds seldom turn'. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Blue Bird is showing 2 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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