Further weakness as Acadia Healthcare Company (NASDAQ:ACHC) drops 6.6% this week, taking one-year losses to 68%

Taking the occasional loss comes part and parcel with investing on the stock market. And unfortunately for Acadia Healthcare Company, Inc. (NASDAQ:ACHC) shareholders, the stock is a lot lower today than it was a year ago. In that relatively short period, the share price has plunged 68%. Even if you look out three years, the returns are still disappointing, with the share price down67% in that time. Furthermore, it's down 26% in about a quarter. That's not much fun for holders.

With the stock having lost 6.6% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

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There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During the last year Acadia Healthcare Company grew its earnings per share, moving from a loss to a profit.

Earnings per share growth rates aren't particularly useful for comparing with the share price, when a company has moved from loss to profit. So it makes sense to check out some other factors.

Acadia Healthcare Company's revenue is actually up 5.5% over the last year. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

Acadia Healthcare Company is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. If you are thinking of buying or selling Acadia Healthcare Company stock, you should check out this free report showing analyst consensus estimates for future profits.

A Different Perspective

Acadia Healthcare Company shareholders are down 68% for the year, but the market itself is up 12%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 4% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 1 warning sign for Acadia Healthcare Company that you should be aware of.

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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.