Apollo Medical Holdings (NASDAQ:AMEH) sheds 4.4% this week, as yearly returns fall more in line with earnings growth
The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But in contrast you can make much more than 100% if the company does well. For example, the Apollo Medical Holdings, Inc. (NASDAQ:AMEH) share price has soared 185% in the last three years. That sort of return is as solid as granite. Also pleasing for shareholders was the 31% gain in the last three months. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.
While this past week has detracted from the company's three-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.
Check out our latest analysis for Apollo Medical Holdings
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During three years of share price growth, Apollo Medical Holdings achieved compound earnings per share growth of 79% per year. This EPS growth is higher than the 42% average annual increase in the share price. So one could reasonably conclude that the market has cooled on the stock.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
This free interactive report on Apollo Medical Holdings' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
The last twelve months weren't great for Apollo Medical Holdings shares, which performed worse than the market, costing holders 31%. The market shed around 7.1%, no doubt weighing on the stock price. Fortunately the longer term story is brighter, with total returns averaging about 42% per year over three years. The recent sell-off could be an opportunity if the business remains sound, so it may be worth checking the fundamental data for signs of a long-term growth trend. It's always interesting to track share price performance over the longer term. But to understand Apollo Medical Holdings better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Apollo Medical Holdings you should be aware of.
Of course Apollo Medical Holdings 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. 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.
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