Shareholders in Amneal Pharmaceuticals (NYSE:AMRX) have lost 54%, as stock drops 13% this past week
If you love investing in stocks you're bound to buy some losers. But the long term shareholders of Amneal Pharmaceuticals, Inc. (NYSE:AMRX) have had an unfortunate run in the last three years. Sadly for them, the share price is down 54% in that time. And more recent buyers are having a tough time too, with a drop of 54% in the last year. And the share price decline continued over the last week, dropping some 13%.
With the stock having lost 13% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.
View our latest analysis for Amneal Pharmaceuticals
Amneal Pharmaceuticals 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over three years, Amneal Pharmaceuticals grew revenue at 9.2% per year. That's a fairly respectable growth rate. So some shareholders would be frustrated with the compound loss of 15% per year. The market must have had really high expectations to be disappointed with this progress. It would be well worth taking a closer look at the company, to determine growth trends (and balance sheet strength).
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. You can see what analysts are predicting for Amneal Pharmaceuticals in this interactive graph of future profit estimates.
A Different Perspective
The last twelve months weren't great for Amneal Pharmaceuticals shares, which performed worse than the market, costing holders 54%. The market shed around 21%, no doubt weighing on the stock price. The three-year loss of 15% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. It's always interesting to track share price performance over the longer term. But to understand Amneal Pharmaceuticals better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Amneal Pharmaceuticals you should be aware of.
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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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