The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) share price has soared 170% in the last three years. That sort of return is as solid as granite. Also pleasing for shareholders was the 25% gain in the last three months.

Since it's been a strong week for Amphastar Pharmaceuticals shareholders, let's have a look at trend of the longer term fundamentals.

Check out our latest analysis for Amphastar Pharmaceuticals

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Amphastar Pharmaceuticals was able to grow its EPS at 150% per year over three years, sending the share price higher. The average annual share price increase of 39% is actually lower than the EPS growth. So one could reasonably conclude that the market has cooled on the stock.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

It is of course excellent to see how Amphastar Pharmaceuticals has grown profits over the years, but the future is more important for shareholders. 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 gained a total return of 7.7% during the year. Unfortunately this falls short of the market return. On the bright side, the longer term returns (running at about 20% a year, over half a decade) look better. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. 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 Amphastar Pharmaceuticals , and understanding them should be part of your investment process.

Of course Amphastar Pharmaceuticals may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.