Goodyear Tire & Rubber (NASDAQ:GT) Shareholders Booked A 89% Gain In The Last Year

By
Simply Wall St
Published
July 07, 2021
NasdaqGS:GT
Source: Shutterstock

It might be of some concern to shareholders to see the The Goodyear Tire & Rubber Company (NASDAQ:GT) share price down 14% in the last month. But looking back over the last year, the returns have actually been rather pleasing! Looking at the full year, the company has easily bested an index fund by gaining 89%.

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. 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.

Goodyear Tire & Rubber actually shrunk its revenue over the last year, with a reduction of 10%. The stock is up 89% in that time, a fine performance given the revenue drop. To us that means that there isn't a lot of correlation between the past revenue performance and the share price, but a closer look at analyst forecasts and the bottom line may well explain a lot.

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

earnings-and-revenue-growth
NasdaqGS:GT Earnings and Revenue Growth July 7th 2021

This free interactive report on Goodyear Tire & Rubber's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that Goodyear Tire & Rubber shareholders have received a total shareholder return of 89% over the last year. There's no doubt those recent returns are much better than the TSR loss of 6% per year over five years. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. 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. Take risks, for example - Goodyear Tire & Rubber has 1 warning sign we think you should be aware of.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.