FreightCar America (NASDAQ:RAIL) shareholder returns have been splendid, earning 194% in 1 year

When you buy shares in a company, there is always a risk that the price drops to zero. But when you pick a company that is really flourishing, you can make more than 100%. For example, the FreightCar America, Inc. (NASDAQ:RAIL) share price has soared 194% in the last 1 year. Most would be very happy with that, especially in just one year! In more good news, the share price has risen 147% in thirty days. We note that FreightCar America reported its financial results recently; luckily, you can catch up on the latest revenue and profit numbers in our company report. Also impressive, the stock is up 60% over three years, making long term shareholders happy, too.

Since the stock has added US$24m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

See our latest analysis for FreightCar America

FreightCar America isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last twelve months, FreightCar America's revenue grew by 29%. We respect that sort of growth, no doubt. The revenue growth is decent but the share price had an even better year, gaining 194%. If the profitability is on the horizon then now could be a very exciting time to be a shareholder. But investors need to be wary of how the 'fear of missing out' could influence them to buy without doing thorough research.

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

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

We're pleased to report that FreightCar America shareholders have received a total shareholder return of 194% over one year. That's better than the annualised return of 9% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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 3 warning signs for FreightCar America that you should be aware of before investing here.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: most of them are flying under the radar).

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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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.