It's been a soft week for FreightCar America, Inc. (NASDAQ:RAIL) shares, which are down 14%. But that does not change the realty that the stock's performance has been terrific, over five years. Indeed, the share price is up a whopping 383% in that time. Arguably, the recent fall is to be expected after such a strong rise. But the real question is whether the business fundamentals can improve over the long term.

Since the long term performance has been good but there's been a recent pullback of 14%, let's check if the fundamentals match the share price.

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FreightCar America wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

For the last half decade, FreightCar America can boast revenue growth at a rate of 31% per year. That's well above most pre-profit companies. Arguably, this is well and truly reflected in the strong share price gain of 37%(per year) over the same period. Despite the strong run, top performers like FreightCar America have been known to go on winning for decades. On the face of it, this looks lke a good opportunity, although we note sentiment seems very positive already.

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

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. You can see what analysts are predicting for FreightCar America in this interactive graph of future profit estimates.

A Different Perspective

We're pleased to report that FreightCar America shareholders have received a total shareholder return of 199% over one year. That's better than the annualised return of 37% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand FreightCar America better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for FreightCar America you should be aware of, and 1 of them doesn't sit too well with us.

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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.