A month has gone by since the last earnings report for AMN Healthcare Services (AMN Quick QuoteAMN - Free Report) . Shares have lost about 4.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is AMN Healthcare due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

AMN Healthcare Q3 Earnings and Revenues Top Estimates

AMN Healthcare Services Inc reported third-quarter 2020 adjusted earnings per share of 82 cents, beating the Zacks Consensus Estimate of 69 cents by 18.8%. The bottom line increased 1.2% year over year.

Revenues of $551.6 million surpassed the Zacks Consensus Estimate by 6%. On a year-over-year basis, revenues fell 2.8%.

Segment Details

In the third quarter of 2020, the Nurse and Allied Solutions segment’s revenues totaled $383 million, down 4% year over year.Allied division revenues fell 28% year over year owing to consistent weakness in therapy demand. However, Travel nurse staffing revenues grew 12% year over year.

The Physician and Leadership Solutions segment’s revenues totaled $109 million, down 24% year over year. The downside was owing to a 19% decline in Locum tenens revenues, 31% drop in Interim leadership revenues and 32% fall in physician and leadership search businesses.

Technology and Workforce Solutions segment revenues totaled $60 million, up 136% year over year and down 8% on an organic basis, primarily attributable to the company’s buyouts of b4health and Stratus Video.

Margin

In the third quarter, gross profit totaled $184.6 million, down 2.8% year over year. As a percentage of revenues, gross margin was 33.5%, contracting 1basis point (bps).

Adjusted operating profit in the quarter was $73.4 million, up 29.2%. As a percentage of revenues, adjusted operating margin was 13.3%, up 329 bps.

Cash Position

The company exited the third quarter with $58.4 million compared with $43.1 million at the end of the second quarter.

Cumulative net cash provided by operating activities came in at $216.9 million, up from $146.2 million a year ago.

Guidance

For the fourth quarter of 2020, AMN Healthcare expects revenues in the range of $575-$585 million. The Zacks Consensus Estimate for the same stands at $568.8 million.

With respect to the Nurse and Allied Solutions segment, the company expects revenues to be flat to slightly decline from the prior-year figure.

In the fourth quarter, Technology and Workforce Solutions segment revenues are expected to grow almost 150% from the prior-year figure.The company projects fourth-quarter revenues at the Physician and Leadership Solutions segment to decline almost 26-28% from the prior-year figure.

Operating margin is expected at 7.6-8.1%, while gross margin is estimated within 32.4-32.7%

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 11.89% due to these changes.

VGM Scores

Currently, AMN Healthcare has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, AMN Healthcare has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.