When you buy a stock there is always a possibility that it could drop 100%. But on a lighter note, a good company can see its share price rise well over 100%. For instance, the price of Antero Midstream Corporation (NYSE:AM) stock is up an impressive 263% over the last five years.

So let’s investigate and see if the longer term performance of the company has been in line with the underlying business’ progress.

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In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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).

During the last half decade, Antero Midstream became profitable. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains. Since the company was unprofitable five years ago, but not three years ago, it’s worth taking a look at the returns in the last three years, too. We can see that the Antero Midstream share price is up 98% in the last three years. During the same period, EPS grew by 8.2% each year. Notably, the EPS growth has been slower than the annualised share price gain of 25% over three years. So one can reasonably conclude the market is more enthusiastic about the stock than it was three years ago.

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

Dive deeper into Antero Midstream’s key metrics by checking this interactive graph of Antero Midstream’s earnings, revenue and cash flow.

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Antero Midstream the TSR over the last 5 years was 481%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

It’s nice to see that Antero Midstream shareholders have received a total shareholder return of 35% over the last year. Of course, that includes the dividend. However, the TSR over five years, coming in at 42% per year, is even more impressive. 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 example, we’ve discovered 2 warning signs for Antero Midstream that you should be aware of before investing here.