Market cap

United Airlines Holdings (NASDAQ:UAL) added $618 million to its market capitalization in the past 7 days, although investors from three years ago are still down 56%

If you build a well-diversified stock portfolio, chances are some of your picks will perform poorly. But the last three years have been particularly difficult in the long term United Airlines Holdings, Inc. (NASDAQ: UAL) shareholders. Unfortunately, they had to deal with a 56% drop in the stock price during this period. And over the past year, the stock price has fallen 20%, so we doubt many shareholders will be thrilled. Shareholders have had an even tougher race lately, with the share price falling 28% in the past 90 days. This could be linked to recent financial results – you can keep up to date with the latest data by reading our corporate report.

The recent 5.3% rise could be a positive sign of things to come, so let’s look a lot at historical fundamentals.

United Airlines Holdings is currently unprofitable, so most analysts would look to revenue growth to get a sense of how fast the underlying business is growing. When a business is not making a profit, you generally expect to see good revenue growth. As you can imagine, rapid revenue growth, when sustained, often results in rapid profit growth.

Over the past three years, United Airlines Holdings has seen its revenue decline by 23% per year. This is certainly a lower result than most nonprofits report. In the absence of declining earnings and revenue, it’s no surprise that investors dumped the stock, driving the price down 16% annually over that time. Bag holders or “bags” are people who buy more shares when the price crashes. They then find themselves “holding the bag” if the shares turn out to be worthless. It could be a while before the company repays long-suffering shareholders with share price gains.

The company’s revenues and profits (over time) are shown in the image below (click to see exact figures).

NasdaqGS: UAL Earnings and Revenue Growth August 3, 2022

It is good to see that there has been significant insider buying over the past three months. This is a positive point. On the other hand, we believe revenue and earnings trends are much more meaningful measures of the business. This free a report showing analyst forecasts should help you form an opinion on United Airlines Holdings

A different perspective

While the broader market lost around 12% in the twelve months, United Airlines Holdings shareholders fared even worse, losing 20%. However, it could simply be that the stock price was impacted by greater market jitters. It might be worth keeping an eye on the fundamentals, in case there is a good opportunity. Unfortunately, last year’s performance capped a bad run, with shareholders facing a total loss of 8% per year over five years. Generally speaking, long-term stock price weakness can be a bad sign, although contrarian investors may want to seek out the stock in hopes of a turnaround. While it is worth considering the various impacts that market conditions can have on the stock price, there are other, even more important factors. For example, we found 1 warning sign for United Airlines Holdings which you should be aware of before investing here.

United Airlines Holdings isn’t the only insider stock to buy. So take a look at this free list of growing companies with insider buying.

Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on US exchanges.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.