Opinions
Bruce Campbell (2)
Grande West Transportation Group
BUS-X
COMMENT
Mar 10, 2017
Stock price when the opinion was issued
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It comes down to contracts and orders. Now is a rebuilding year for them. They have to prove they can be profitable in a low-delivery schedule. Compare them to the larger NFI which has a larger backlog and overall business, though neither is doing well this year.
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The stock has seen an amazing recovery with business picking up. The move into EV was welcomed but the space remains competitive. It is not without risk, and to continue their EV projects, they will need capital. Expectations are high which adds additional risk. Unlock Premium - Try 5i Free
Buses may be electric, CNG, or clean diesel and electric buses are offered by the company.
Over the past five years, sales have shrunk by a compounded annual growth rate of 14.5%, while EBITDA and Net income have grown at a CAGR of more than 100% over the past five years. The company is expected to turn profitable in 2024.
While the balance sheet has improved over the year, negative cash flows and EBITDA make it less attractive compared to its peers.
We think some of this is priced in, however, VCM is also expected to grow at multiples of its current sales while slowing growth is expected for others.
There is still a long way to go before the growth materializes, and that's still an 'if' it does.
We would consider the name risky.
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This has done phenomenally well. They are still in the early stages of great things. So far, they’ve rolled out across Canada, they’ve got initials orders from a number of different transit systems in Canada, and now those transit systems are coming back ordering big multiples of what they initially ordered. They are also a little into the US. There are really 2 big markets in the US, 1) transit market and 2) private transportation such as airport shuttles, rental car shuttles, etc. They needed their “Buy and Build America” certification before getting started in the transit market. They now have that. They have a partner that has just started to ramp up with the sales team. During this year, you are probably going to see a number of announcements where they are getting initial orders. He is excited where this company could be 3-5 years from now.