AMN Healthcare Services (AMN Quick QuoteAMN - Free Report) is the $4.5 billion healthcare staffing company that specializes in traveling medical professionals.

Their business has been booming since Covid-19 made highly-mobile critical care services so vital as outbreaks could surface in new hotspots every few weeks.

Because of the burdens on hospital systems from Covid patients with comorbidities, skilled critical care staff became nearly priceless as we will discuss.

AMN recruits and places nurses, physicians, and other healthcare professionals in travel or permanent assignments in acute-care facilities, physician practice groups, and other healthcare facilities.

Strong Sales and Profit Growth

AMN is a Zacks #1 Rank once again after reporting another "beat-and-raise" quarter in early August.

In the weeks hence, analysts were busy raising both top and bottom line estimates.

The revenue consensus forecast for this year sees 28.5% growth to cross $5.1 billion. And the EPS outlook measures over 40% growth to breach $11.25.

One issue that might concern investors though is that next year's projections show a reversal. Current top and bottom line consensus estimates from 4-5 covering research analysts call for declines of -16.6% and -26.3%, respectively.

A Soft Warning from HCA and Tenet

The explanation for that may exist partially in sentiment from two large hospital enterprises.

In late July, Baird analyst Mark Marcon reported to investors that shares of AMN were down over 10%, likely due to comments from HCA Healthcare (HCA Quick QuoteHCA - Free Report) and Tenet Healthcare (THC Quick QuoteTHC - Free Report) , whose results beat expectations for Q2 as labor costs began to ease.

The analyst noted that HCA indicated it had successfully eased expenses on multiple fronts.

To get more recently clarity on the situation, I went to our resident expert Tracey Ryniec. She has followed AMN for many years, even before Covid, and owns shares in the Value Investor portfolio.

Here were some of her comments (with any errors or omissions belonging to me)...

Nursing wages are falling for the travel nurses now that COVID is easing. Since they do the staffing for it, most of the travel nurses actually work for AMN and then they get sent out through AMN. As those wages fall, so will AMN's earnings.

There is still a massive nurse shortage, however. So they won't totally crash down because it's still supply and demand dynamics which should be in effect for the next several years.

The labor costs are coming down but not as much as the analysts feared. The travel nurses are no longer getting as much as $3,500 a week, but they can still make $3,000 a week. Because, frankly, even without COVID there aren't enough.

Many younger nurses are quitting due to burnout, which wasn't expected. And the Baby Boomer nurses are actually retiring -- which was always going to be a problem.

The state of Kentucky needs 5,000 nurses. That's just one state. They are paying for tuition for people who are going to nursing school because they are so desperate.

This is great analysis from Tracey. And I would only add the dimension of aging demographics -- where people are also living longer -- and America's "comorbidities" problem with poor nutrition and obesity leading to multiple complications like diabetes, heart disease, and cancer.

Beyond Covid: A Diverse Array of Vital Services

Based in San Diego, AMN has seen its business evolve beyond traditional healthcare staffing and recruitment services, thereby becoming a strategic total talent solutions partner with its clients. The company has expanded its portfolio to serve a diverse and growing set of healthcare talent-related needs.

In addition to professional staffing and recruitment services, AMN Healthcare’s suite of healthcare workforce solutions includes MSP, vendor management systems (VMS), medical language interpretation services, predictive labor analytics, workforce optimization technology and consulting, clinical labor scheduling, recruitment process outsourcing (RPO), revenue cycle solutions, credentialing software services, and virtual care management services.

AMN enables its clients to build, manage and optimize their healthcare talent to deliver great patient outcomes and experience. The company reports through three segments — Nurse and Allied Solutions (75.1% of total FY21 revenues, up 75.9% from FY20), Physician and Leadership Solutions (14.9%, up 27.3%), and Technology and Workforce Solutions (10%, up 75.6%).

Nurse and Allied Solutions segment includes the company’s travel nurse staffing, rapid response nurse staffing and labor disruption, allied staffing, local staffing, and revenue cycle solutions businesses.

The Physician and Leadership Solutions segment includes the company’s locum tenens staffing, healthcare interim leadership staffing, executive search, and physician permanent placement businesses.

The technology and workforce solutions segment includes the company’s language services, VMS, workforce optimization, telehealth, credentialing, and outsourced solutions businesses.

Cash Flow Growth

Finally, it's worth noting the strong cash-flow growth of AMN. Here was our recent analysis for investors on this topic...

Cash is the lifeblood of any business, but higher-than-average cash flow growth is more beneficial and important for growth-oriented companies than for mature companies. That's because high cash accumulation enables these companies to undertake new projects without raising expensive outside funds.

Right now, year-over-year cash flow growth for AMN Healthcare is 89.9%, which is higher than many of its peers. In fact, the rate compares to the industry average of 29.4%.

While investors should actually consider the current cash flow growth, it's worth taking a look at the historical rate too for putting the current reading into proper perspective. The company's annualized cash flow growth rate has been 26.7% over the past 3-5 years versus the industry average of 14.8%.

Bottom line on AMN: Accumulate shares near $100 and look for them to grow for several more years given these important healthcare trends.