Unless you borrow money to invest, the potential losses are limited.  But if you pick the right stock, you can make a lot more than 100%.  Take, for example FTAI Aviation Ltd. (NASDAQ:FTAI). Its share price is already up an impressive 118% in the last twelve months.    Also pleasing for shareholders was the 12% gain in the last three months.      Also impressive, the stock is up 99% over three years, making long term shareholders happy, too.    

So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.  

See our latest analysis for FTAI Aviation

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance.  One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

FTAI Aviation went from making a loss to reporting a profit, in the last year.

When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action.

We think that the revenue growth of 167% could have some investors interested.  We do see some companies suppress earnings in order to accelerate revenue growth.    

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

NasdaqGS:FTAI Earnings and Revenue Growth October 7th 2023

We know that FTAI Aviation has improved its bottom line lately, but what does the future have in store?  This free report showing analyst forecasts should help you form a view on FTAI Aviation  

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR).  The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested.  It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend.  As it happens, FTAI Aviation's TSR for the last 1 year was 129%, which exceeds the share price return mentioned earlier.  And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

It's nice to see that FTAI Aviation shareholders have received a total shareholder return of 129% over the last year.   That's including the dividend.     Since the one-year TSR is better than the five-year TSR (the latter coming in at 26% per year), it would seem that the stock's performance has improved in recent times.  Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time.        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.   Like risks, for instance. Every company has them, and we've spotted   3 warning signs for FTAI Aviation  (of which 2 are a bit concerning!) you should know about.    

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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.