American Airlines Group (NASDAQ:AAL) shareholders lost 62% as shares fell 8.7% last week
Statistically speaking, long-term investing is a profitable business. But unfortunately, some businesses just don’t succeed. For example the American Airlines Group Inc. (NASDAQ:AAL) the stock price has fallen 64% in five years. It’s extremely sub-optimal, to say the least. And some of the more recent buyers are likely also worried, with the stock having fallen 20% in the past year. And the share price decline has continued over the past week, dropping around 8.7%. However, this decision may have been influenced by the overall market, which fell 6.4% during this period.
Given that the past week has been tough for shareholders, let’s take a look at the fundamentals and see what we can learn.
See our latest analysis for American Airlines Group
Given that American Airlines Group has posted losses over the past twelve months, we think the market is likely more focused on revenue and revenue growth, at least for now. Generally speaking, companies without profits should increase their revenue every year, and at a good pace. Indeed, rapid revenue growth can be easily extrapolated to predict profits, often of considerable size.
For half a decade, American Airlines Group has reduced its year-over-year revenue by 13% for each year. This is certainly a lower result than what most nonprofits report. Arguably, the market reacted appropriately to this trading performance by driving the stock price down 10% (annualized) over the same period. It’s fair to say that most investors don’t like investing in loss-making companies with declining revenues. It looks like a very risky stock to buy, at a glance.
You can see how earnings and income have changed over time below (find out the exact values by clicking on the image).
American Airlines Group is well known to investors and many smart analysts have tried to predict future earnings levels. We therefore recommend that you consult this free report showing consensus forecast
A different perspective
We regret to report that American Airlines Group shareholders are down 20% for the year. Unfortunately, this is worse than the general market decline of 1.4%. However, it could simply be that the stock price was impacted by greater market jitters. It might be worth keeping an eye on the fundamentals, in case there is a good opportunity. Unfortunately, last year’s performance may point to unresolved challenges, given that it was worse than the 10% annualized loss over the past half-decade. Generally speaking, long-term stock price weakness can be a bad sign, though contrarian investors might want to hunt for the stock in hopes of a turnaround. It is always interesting to follow the evolution of the share price over the long term. But to better understand American Airlines Group, we need to consider many other factors. For example, we have identified 2 warning signs for American Airlines Group of which you should be aware.
We’ll like American Airlines Group better if we see big insider buying. In the meantime, watch this free list of growing companies with significant and recent insider buying.
Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on US exchanges.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.