Even though Allscripts Healthcare Solutions (NASDAQ:MDRX) has lost US$79m market cap in last 7 days, shareholders are still up 103% over 3 years
It might be of some concern to shareholders to see the Allscripts Healthcare Solutions, Inc. (NASDAQ:MDRX) share price down 11% in the last month. But that doesn't change the fact that the returns over the last three years have been very strong. The share price marched upwards over that time, and is now 103% higher than it was. It's not uncommon to see a share price retrace a bit, after a big gain. If the business can perform well for years to come, then the recent drop could be an opportunity.
Although Allscripts Healthcare Solutions has shed US$79m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.
See our latest analysis for Allscripts Healthcare Solutions
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
During three years of share price growth, Allscripts Healthcare Solutions moved from a loss to profitability. Given the importance of this milestone, it's not overly surprising that the share price has increased strongly.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
It is of course excellent to see how Allscripts Healthcare Solutions has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at Allscripts Healthcare Solutions' financial health with this free report on its balance sheet.
A Different Perspective
It's nice to see that Allscripts Healthcare Solutions shareholders have received a total shareholder return of 30% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 11% 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. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 2 warning signs we've spotted with Allscripts Healthcare Solutions .
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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.
