Even the best stock pickers will make plenty of bad investments. And unfortunately for Acadia Healthcare Company, Inc. (NASDAQ:ACHC) shareholders, the stock is a lot lower today than it was a year ago. The share price has slid 52% in that time. However, the longer term returns haven't been so bad, with the stock down 28% in the last three years.

So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.

See our latest analysis for Acadia Healthcare Company

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.

Acadia Healthcare Company managed to increase earnings per share from a loss to a profit, over the last 12 months.

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 managed to grow revenue over the last year, which is usually a real positive. Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Acadia Healthcare Company is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for Acadia Healthcare Company in this interactive graph of future profit estimates.

A Different Perspective

Investors in Acadia Healthcare Company had a tough year, with a total loss of 52%, against a market gain of about 20%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 6%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Acadia Healthcare Company , and understanding them should be part of your investment process.

We will like Acadia Healthcare Company better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider 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.