Market is not liking AMN Healthcare Services' (NYSE:AMN) earnings decline as stock retreats 7.0% this week
AMN Healthcare Services, Inc. (NYSE:AMN) shareholders should be happy to see the share price up 10% in the last month. But that is minimal compensation for the share price under-performance over the last year. In fact the stock is down 26% in the last year, well below the market return.
If the past week is anything to go by, investor sentiment for AMN Healthcare Services isn't positive, so let's see if there's a mismatch between fundamentals and the share price.
View our latest analysis for AMN Healthcare Services
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.
Unhappily, AMN Healthcare Services had to report a 46% decline in EPS over the last year. This fall in the EPS is significantly worse than the 26% the share price fall. So the market may not be too worried about the EPS figure, at the moment -- or it may have expected earnings to drop faster.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. Dive deeper into the earnings by checking this interactive graph of AMN Healthcare Services' earnings, revenue and cash flow.
A Different Perspective
Investors in AMN Healthcare Services had a tough year, with a total loss of 26%, against a market gain of about 31%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 5%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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. Case in point: We've spotted 2 warning signs for AMN Healthcare Services you should be aware of.
There are plenty of other companies that have insiders buying up shares. You probably do 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 American 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.
