AirAsia Group Berhad (KLSE:AIRASIA) Has Returned Negative 55% To Its Shareholders In The Past Three Years

It is a pleasure to report that the AirAsia Group Berhad (KLSE:AIRASIA) is up 36% in the last quarter. But over the last three years we've seen a quite serious decline. Indeed, the share price is down a tragic 75% in the last three years. Some might say the recent bounce is to be expected after such a bad drop. Perhaps the company has turned over a new leaf.

View our latest analysis for AirAsia Group Berhad

Because AirAsia Group Berhad made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last three years, AirAsia Group Berhad's revenue dropped 1.7% per year. That is not a good result. The share price fall of 21% (per year, over three years) is a stern reminder that money-losing companies are expected to grow revenue. This business clearly needs to grow revenues if it is to perform as investors hope. There's no more than a snowball's chance in hell that share price will head back to its old highs, in the short term.

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

AirAsia Group Berhad is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for AirAsia Group Berhad in this interactive graph of future profit estimates.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between AirAsia Group Berhad's total shareholder return (TSR) and its share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Its history of dividend payouts mean that AirAsia Group Berhad's TSR, which was a 55% drop over the last 3 years, was not as bad as the share price return.

A Different Perspective

Investors in AirAsia Group Berhad had a tough year, with a total loss of 48%, against a market gain of about 5.9%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 4%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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. For example, we've discovered 2 warning signs for AirAsia Group Berhad (1 is significant!) that you should be aware of before investing here.

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

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This article by Simply Wall St is general in nature. 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.
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