The three-year loss for AMN Healthcare Services (NYSE:AMN) shareholders likely driven by its shrinking earnings

Every investor on earth makes bad calls sometimes. But you have a problem if you face massive losses more than once in a while. So take a moment to sympathize with the long term shareholders of AMN Healthcare Services, Inc. (NYSE:AMN), who have seen the share price tank a massive 76% over a three year period. That'd be enough to cause even the strongest minds some disquiet. The more recent news is of little comfort, with the share price down 66% in a year. The falls have accelerated recently, with the share price down 34% in the last three months.

The recent uptick of 6.9% could be a positive sign of things to come, so let's take a look at historical fundamentals.

View our latest analysis for AMN Healthcare Services

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the three years that the share price fell, AMN Healthcare Services' earnings per share (EPS) dropped by 33% each year. This change in EPS is reasonably close to the 38% average annual decrease in the share price. That suggests that the market sentiment around the company hasn't changed much over that time, despite the disappointment. In this case, it seems that the EPS is guiding the share price.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. It might be well worthwhile taking a look at our free report on AMN Healthcare Services' earnings, revenue and cash flow.

A Different Perspective

While the broader market gained around 28% in the last year, AMN Healthcare Services shareholders lost 66%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 10% 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. It's always interesting to track share price performance over the longer term. But to understand AMN Healthcare Services better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for AMN Healthcare Services (of which 2 are a bit concerning!) you should know about.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap 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.