Did Amphastar Pharmaceuticals' (NASDAQ:AMPH) Share Price Deserve to Gain 31%?

When you buy and hold a stock for the long term, you definitely want it to provide a positive return. Furthermore, you'd generally like to see the share price rise faster than the market But Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) has fallen short of that second goal, with a share price rise of 31% over five years, which is below the market return. Meanwhile, the last twelve months saw the share price rise 4.6%.

Check out our latest analysis for Amphastar Pharmaceuticals

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. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

For the last half decade, Amphastar Pharmaceuticals can boast revenue growth at a rate of 8.2% per year. That's a pretty good long term growth rate. While the share price has gained 6% per year for five years, that's hardly amazing considering the market also rose. Arguably, that means, the market (previously) expected stronger growth from the company.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth

We know that Amphastar Pharmaceuticals has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Amphastar Pharmaceuticals stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Amphastar Pharmaceuticals shareholders are up 4.6% for the year. Unfortunately this falls short of the market return. If we look back over five years, the returns are even better, coming in at 6% per year for five years. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. It's always interesting to track share price performance over the longer term. But to understand Amphastar Pharmaceuticals better, we need to consider many other factors. For instance, we've identified 4 warning signs for Amphastar Pharmaceuticals that you should be aware of.

But note: Amphastar Pharmaceuticals may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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. 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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