Goodyear Tire & Rubber (NASDAQ:GT) shareholders are up 3.2% this past week, but still in the red over the last five years

Goodyear Tire & Rubber Company -2.52% Post

Goodyear Tire & Rubber Company





+0.36% Post

The Goodyear Tire & Rubber Company (NASDAQ:GT) shareholders should be happy to see the share price up 15% in the last month. But over the last half decade, the stock has not performed well. After all, the share price is down 28% in that time, significantly under-performing the market.

While the stock has risen 3.2% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

View our latest analysis for Goodyear Tire & Rubber

Given that Goodyear Tire & Rubber 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

Over five years, Goodyear Tire & Rubber grew its revenue at 9.6% per year. That's a fairly respectable growth rate. We doubt many shareholders are ok with the fact the share price has fallen 5% each year for half a decade. Those who bought back then clearly believed in stronger growth - and maybe even profits. The lesson is that if you buy shares in a money losing company you could end up losing money.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

NasdaqGS:GT Earnings and Revenue Growth March 28th 2024

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. So it makes a lot of sense to check out what analysts think Goodyear Tire & Rubber will earn in the future (free profit forecasts).

What About The Total Shareholder Return (TSR)?

We've already covered Goodyear Tire & Rubber's share price action, but we should also mention its total shareholder return (TSR). Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Dividends have been really beneficial for Goodyear Tire & Rubber shareholders, and that cash payout explains why its total shareholder loss of 25%, over the last 5 years, isn't as bad as the share price return.

A Different Perspective

Goodyear Tire & Rubber provided a TSR of 28% over the last twelve months. But that return falls short of the market. But at least that's still a gain! Over five years the TSR has been a reduction of 5% per year, over five years. So this might be a sign the business has turned its fortunes around. 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. Case in point: We've spotted 1 warning sign for Goodyear Tire & Rubber you should be aware of.

Goodyear Tire & Rubber is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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

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