International Consolidated Airlines Group's (LON:IAG) earnings trajectory could turn positive as the stock grows 5.3% this past week

Generally speaking long term investing is the way to go. But no-one is immune from buying too high. For example the International Consolidated Airlines Group S.A. (LON:IAG) share price dropped 73% over five years. That's not a lot of fun for true believers. In contrast, the stock price has popped 8.4% in the last thirty days.

While the stock has risen 5.3% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

Check out our latest analysis for International Consolidated Airlines Group

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

International Consolidated Airlines Group became profitable within the last five years. Most would consider that to be a good thing, so it's counter-intuitive to see the share price declining. Other metrics may better explain the share price move.

It could be that the revenue decline of 3.2% per year is viewed as evidence that International Consolidated Airlines Group is shrinking. That could explain the weak share price.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

International Consolidated Airlines Group is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. Given we have quite a good number of analyst forecasts, it might be well worth checking out this free chart depicting consensus estimates.

What About The Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between International Consolidated Airlines Group's total shareholder return (TSR) and its share price return. 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 International Consolidated Airlines Group shareholders, and that cash payout explains why its total shareholder loss of 55%, over the last 5 years, isn't as bad as the share price return.

A Different Perspective

It's good to see that International Consolidated Airlines Group has rewarded shareholders with a total shareholder return of 22% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 9% per year over five years. 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. For example, we've discovered 1 warning sign for International Consolidated Airlines Group that you should be aware of before investing here.

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 British 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.