Even the best stock pickers will make plenty of bad investments. Anyone who held ATI Physical Therapy, Inc. (NYSE:ATIP) over the last year knows what a loser feels like. In that relatively short period, the share price has plunged 64%. ATI Physical Therapy may have better days ahead, of course; we've only looked at a one year period. On the other hand the share price has bounced 6.2% over the last week. The buoyant market could have helped drive the share price pop, since stocks are up 3.7% in the same period.

Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.

See our latest analysis for ATI Physical Therapy

ATI Physical Therapy wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last twelve months, ATI Physical Therapy increased its revenue by 3.3%. That's not a very high growth rate considering it doesn't make profits. It's likely this muted growth has contributed to the share price decline of 64% in the last year. We'd want to see evidence that future revenue growth will be stronger before getting too interested. When a stock falls hard like this, it can signal an over-reaction. Our preference is to wait for a fundamental improvements before buying, but now could be a good time for some research.

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

If you are thinking of buying or selling ATI Physical Therapy stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

ATI Physical Therapy shareholders are down 64% for the year, even worse than the market loss of 21%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. With the stock down 6.4% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. 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 ATI Physical Therapy that you should be aware of.

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 US 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.

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