It hasn't been the best quarter for Acadia Healthcare Company, Inc. (NASDAQ:ACHC) shareholders, since the share price has fallen 24% in that time. On the bright side the share price is up over the last half decade. However we are not very impressed because the share price is only up 96%, less than the market return of 100%.

In light of the stock dropping 3.6% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive five-year return.

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...' 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.

Acadia Healthcare Company has made a profit in the past. On the other hand, it reported a trailing twelve months loss, suggesting it isn't reliably profitable. So it might be better to look at other metrics to try to understand the share price.

On the other hand, Acadia Healthcare Company's revenue is growing nicely, at a compound rate of 4.4% over the last five years. It's quite possible that management are prioritizing revenue growth over EPS growth at the moment.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Acadia Healthcare Company is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. 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 5.3% for the year, but the market itself is up 28%. 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. On the bright side, long term shareholders have made money, with a gain of 14% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Acadia Healthcare Company better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Acadia Healthcare Company (of which 1 doesn't sit too well with us!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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.