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This month, we saw the Amplify Energy Corp. (NYSE:AMPY) up an impressive 106%. But that is meagre solace when you consider how the price has plummeted over the last year. During that time the share price has plummeted like a stone, down 74%. It's not uncommon to see a bounce after a drop like that. Only time will tell if the company can sustain the turnaround.
Check out our latest analysis for Amplify Energy
Amplify Energy isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In just one year Amplify Energy saw its revenue fall by 18%. That looks pretty grim, at a glance. The market obviously agrees, since the share price tanked 74%. Holders should not lose the lesson: loss making companies should grow revenue. But markets do over-react, so there opportunity for investors who are willing to take the time to dig deeper and understand the business.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
This free interactive report on Amplify Energy's balance sheet strength is a great place to start, if you want to investigate the stock further.
What about the Total Shareholder Return (TSR)?
Investors should note that there's a difference between Amplify Energy's total shareholder return (TSR) and its share price change, which we've covered above. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Its history of dividend payouts mean that Amplify Energy's TSR, which was a 71% drop over the last year, was not as bad as the share price return.
A Different Perspective
Given that the market gained 25% in the last year, Amplify Energy shareholders might be miffed that they lost 71%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. Putting aside the last twelve months, it's good to see the share price has rebounded by 24%, in the last ninety days. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). 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. For instance, we've identified 3 warning signs for Amplify Energy that you should be aware of.