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Low-cost index funds make it easy to achieve average market returns. But if you invest in individual stocks, some are likely to underperform. That's what has happened with the Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) share price. It's up 33% over three years, but that is below the market return. Looking at more recent returns, the stock is up 18% in a year.
While Amphastar Pharmaceuticals made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.
Over the last three years Amphastar Pharmaceuticals has grown its revenue at 3.7% annually. Considering the company is losing money, we think that rate of revenue growth is uninspiring. The market doesn't seem too pleased with the revenue growth rate, given the modest 10% annual share price gain over three years. A closer look at the revenue and profit trends could uncover help us understand if the company will be profitable in the future.
The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).
We know that Amphastar Pharmaceuticals has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at Amphastar Pharmaceuticals's financial health with this free report on its balance sheet.
A Different Perspective
We're pleased to report that Amphastar Pharmaceuticals rewarded shareholders with a total shareholder return of 18% over the last year. That's better than the annualized TSR of 10% over the last three years. These improved returns may hint at some real business momentum, implying that now could be a great time to delve deeper. Before spending more time on Amphastar Pharmaceuticals it might be wise to click here to see if insiders have been buying or selling shares.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.