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Despite delivering investors losses of 33% over the past 1 year, Avantor (NYSE:AVTR) has been growing its earnings

Avantor, Inc. (NYSE:AVTR) shareholders should be happy to see the share price up 15% in the last month. But in truth the last year hasn't been good for the share price. After all, the share price is down 33% in the last year, significantly under-performing the market.

The recent uptick of 6.2% could be a positive sign of things to come, so let's take a look at historical fundamentals.

See our latest analysis for Avantor

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

Even though the Avantor share price is down over the year, its EPS actually improved. It could be that the share price was previously over-hyped.

It's fair to say that the share price does not seem to be reflecting the EPS growth. So it's easy to justify a look at some other metrics.

Avantor managed to grow revenue over the last year, which is usually a real positive. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
earnings-and-revenue-growth

It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. If you are thinking of buying or selling Avantor stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

Avantor shareholders are down 33% for the year, falling short of the market return. Meanwhile, the broader market slid about 8.1%, likely weighing on the stock. Fortunately the longer term story is brighter, with total returns averaging about 9% per year over three years. Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Avantor you should be aware of, and 1 of them can't be ignored.

Avantor is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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