Shareholders Are Raving About How The Navistar International (NYSE:NAV) Share Price Increased 328%

By
Simply Wall St
Published
March 03, 2021
NYSE:NAV

Buying shares in the best businesses can build meaningful wealth for you and your family. While the best companies are hard to find, but they can generate massive returns over long periods. Just think about the savvy investors who held Navistar International Corporation (NYSE:NAV) shares for the last five years, while they gained 328%. This just goes to show the value creation that some businesses can achieve.

View our latest analysis for Navistar International

Navistar International isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

For the last half decade, Navistar International can boast revenue growth at a rate of 2.5% per year. That's not a very high growth rate considering the bottom line. So shareholders should be pretty elated with the 34% increase per year, in that time. We don't think the growth over the period is that great, but it could be that faster growth appears to some to be on the horizon. Having said that, a closer look at the numbers might surface good reasons to believe that profits will gush in the future.

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

earnings-and-revenue-growth
NYSE:NAV Earnings and Revenue Growth March 3rd 2021

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

Navistar International shareholders gained a total return of 25% during the year. Unfortunately this falls short of the market return. On the bright side, the longer term returns (running at about 34% a year, over half a decade) look better. Maybe the share price is just taking a breather while the business executes on its growth strategy. It's always interesting to track share price performance over the longer term. But to understand Navistar International better, we need to consider many other factors. Take risks, for example - Navistar International has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

Of course Navistar International may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020


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