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Bull of the Day: Amedisys (AMED)

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Headquartered in Baton Rouge, LA, Amedisys Inc. (AMED - Free Report) is a leading provider of at-home healthcare, from home health to hospice to personal care. This can include home-based recovery and rehabilitation after an operation or injury, care focused on empowering them to manage a chronic disease, palliative care for those with a terminal illness, or hospice care at the end of life.

Impressive Q3 Earnings

During the third quarter, EPS of 95 cents crushed the Zacks Consensus Estimate of 77 cents and grew almost 70% year-over-year.

Revenues of $417 million also beat our consensus estimate and jumped 11.7% from the prior year quarter.

Amedisys’s Home Health division generated revenues of $294 million, while Medicare revenues increased 8.7%. Its Hospice division saw revenues of $103.4 million, up 7.8% year-over-year.

Gross margin expanded 100 basis points (bps) to 40.2% in Q3. 

In the company’s earnings release, CEO Paul B. Kusserow said “I am proud of our third quarter results and the strong execution of our team. We are pleased with the growth trends we continue to see in home health. Our performance in home health helped drive our significant results this quarter and I am delighted with the progress the home health segment has made this year.”

Price Performance

Amedisys, Inc. Price and Consensus

Amedisys, Inc. Price and Consensus | Amedisys, Inc. Quote

Year-to-date, AMED stock has gained over 150%. In comparison, the S&P 500 is up about 1%.

Estimates have been rising lately too, pushing the stock towards a Zacks Rank #1 (Strong Buy).

For the current fiscal year, Amedisys’s earnings are expected to grow 62% year-over-year. The Zacks Consensus Estimate has moved 17 cents higher in the past 60 days from $3.58 to $3.41 cents per share.

Next year looks pretty strong too, and earnings are expected to grow almost 13%; the consensus estimate sits at $4.04 cents per share, with eight upward revisions in the last two months.

Bottom Line

AMED’s strong performance in 2018, plus encouraging growth in its Home Health and Hospice divisions, puts the company in a good spot heading into the new year. Plus, its recent acquisition of hospice care provider Compassionate Care Hospice will give Amedisys even more market share in the industry, making it the third-largest hospice provider in America.

For those investors looking for a healthcare stock to add to their portfolio, AMED should definitely be on the shortlist.

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