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As an investor its worth striving to ensure your overall portfolio beats the market average. But if you try your hand at stock picking, your risk returning less than the market. Unfortunately, that's been the case for longer term Spirit AeroSystems Holdings, Inc. (NYSE:SPR) shareholders, since the share price is down 47% in the last three years, falling well short of the market return of around 58%.
It's worthwhile assessing if the company's economics have been moving in lockstep with these underwhelming shareholder returns, or if there is some disparity between the two. So let's do just that.
Check out our latest analysis for Spirit AeroSystems Holdings
Given that Spirit AeroSystems Holdings didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Over the last three years, Spirit AeroSystems Holdings' revenue dropped 31% per year. That means its revenue trend is very weak compared to other loss making companies. On the face of it we'd posit the share price fall of 14% compound, over three years is well justified by the fundamental deterioration. It would probably be worth asking whether the company can fund itself to profitability. Of course, it is possible for businesses to bounce back from a revenue drop - but we'd want to see that before getting interested.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Spirit AeroSystems Holdings is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. So it makes a lot of sense to check out what analysts think Spirit AeroSystems Holdings will earn in the future (free analyst consensus estimates)
A Different Perspective
It's nice to see that Spirit AeroSystems Holdings shareholders have received a total shareholder return of 1.3% over the last year. And that does include the dividend. Notably the five-year annualised TSR loss of 3% per year compares very unfavourably with the recent share price performance. This makes us a little wary, but the business might have turned around its fortunes. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - Spirit AeroSystems Holdings has 1 warning sign we think you should be aware of.