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Why Is Amedisys (AMED) Down 22.9% Since Last Earnings Report?
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It has been about a month since the last earnings report for Amedisys (AMED - Free Report) . Shares have lost about 22.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Amedisys 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.
Amedisys reported adjusted earnings per share of $1.53 for third-quarter 2021, down 31.7% from the year-ago figure. The bottom line, however, beat the Zacks Consensus Estimate by 12.5%.
The quarter’s adjustments include contingency accrual, certain COVID-related costs as well as benefits from CARES Act & State COVID-19 grants.
GAAP earnings per share for the third quarter was $1.37, down 36.6% compared with the year-ago $2.16.
Net service revenues grossed $553.5 million, up 1.7% year over year. The top line missed the Zacks Consensus Estimate by 2.7%.
Segment in Detail
Within the Home Health division, net service revenues totaled $338.6 million in the quarter, reflecting a 3.9% rise year over year. Within this segment, Medicare revenues of $228.2 million improved 2.7% year over year. Non-Medicare revenues increased 6.4% to $110.4 million.
Within the Hospice division, net service revenues were $197.5 million (down 1.1% year over year), including Medicare revenues of $187.8 million (down 0.6%) and non-Medicare revenues of $9.7 million (down 9.3%).
At Personal Care, net service revenues totaled $15.9 million, reflecting a decline of 13.6% from the year-ago number. The High Acuity Care segment reported net service revenues of 1.5 million in the third quarter. The Corporate segment did not register any recognizable revenues in the third quarter.
Margins
Gross profit for the company declined 1.3% to $243.2 million in the quarter under review. Gross margin contracted 135 basis points (bps) to 43.9%.
Expenses on salaries and benefits fell 3.1% to $119.4 million. Other expenses rose 11.8% to $55.2 million. Adjusted operating profit of $68.7 million reflected a 7.1% decline from the year-ago quarter. Adjusted operating margin contracted 118 bps to 12.4% from the prior-year level.
Liquidity and Cash Position
Amedisys exited the third quarter of 2021 with cash and cash equivalents of $124.5 million compared with $91.7 million at the end of second-quarter 2021. The company's long-term obligations (excluding the current portion) were $434.8 million at the end of the third quarter compared with $179.4 million at the end of the last reported quarter.
Cumulative net cash provided by operating activities at the end of the third quarter was $61.8 million compared with $83.1 million a year ago.
2021 Guidance
Amedisys updated its outlook for 2021 for both core Amedisys and Contessa business, taking into account the rapidly-changing business environment posed by the COVID-19 pandemic, future regulations or government interventions, reduction in elective procedures, change in patient behavior and further decline in senior living occupancy and other issues that can potentially impact the company’s core business.
For 2021, the company anticipates net service revenues in the range of $2.200 billion to $2.205 billion, a drop from the earlier guidance of $2.230-$2.245. Adjusted earnings per share are projected in the range of $5.88-$5.93, a decline from the prior guidance of $6.37-$6.49.
The Zacks Consensus Estimate for 2021 revenues is pegged at $2.25 billion. The Zacks Consensus Estimate for adjusted earnings per share is pegged at $6.09.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -19.69% due to these changes.
VGM Scores
Currently, Amedisys has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Amedisys has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Why Is Amedisys (AMED) Down 22.9% Since Last Earnings Report?
It has been about a month since the last earnings report for Amedisys (AMED - Free Report) . Shares have lost about 22.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Amedisys 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.
Amedisys Tops Q3 Earnings Estimates, Slashes‘21 View
Amedisys reported adjusted earnings per share of $1.53 for third-quarter 2021, down 31.7% from the year-ago figure. The bottom line, however, beat the Zacks Consensus Estimate by 12.5%.
The quarter’s adjustments include contingency accrual, certain COVID-related costs as well as benefits from CARES Act & State COVID-19 grants.
GAAP earnings per share for the third quarter was $1.37, down 36.6% compared with the year-ago $2.16.
Net service revenues grossed $553.5 million, up 1.7% year over year. The top line missed the Zacks Consensus Estimate by 2.7%.
Segment in Detail
Within the Home Health division, net service revenues totaled $338.6 million in the quarter, reflecting a 3.9% rise year over year. Within this segment, Medicare revenues of $228.2 million improved 2.7% year over year. Non-Medicare revenues increased 6.4% to $110.4 million.
Within the Hospice division, net service revenues were $197.5 million (down 1.1% year over year), including Medicare revenues of $187.8 million (down 0.6%) and non-Medicare revenues of $9.7 million (down 9.3%).
At Personal Care, net service revenues totaled $15.9 million, reflecting a decline of 13.6% from the year-ago number. The High Acuity Care segment reported net service revenues of 1.5 million in the third quarter. The Corporate segment did not register any recognizable revenues in the third quarter.
Margins
Gross profit for the company declined 1.3% to $243.2 million in the quarter under review. Gross margin contracted 135 basis points (bps) to 43.9%.
Expenses on salaries and benefits fell 3.1% to $119.4 million. Other expenses rose 11.8% to $55.2 million. Adjusted operating profit of $68.7 million reflected a 7.1% decline from the year-ago quarter. Adjusted operating margin contracted 118 bps to 12.4% from the prior-year level.
Liquidity and Cash Position
Amedisys exited the third quarter of 2021 with cash and cash equivalents of $124.5 million compared with $91.7 million at the end of second-quarter 2021. The company's long-term obligations (excluding the current portion) were $434.8 million at the end of the third quarter compared with $179.4 million at the end of the last reported quarter.
Cumulative net cash provided by operating activities at the end of the third quarter was $61.8 million compared with $83.1 million a year ago.
2021 Guidance
Amedisys updated its outlook for 2021 for both core Amedisys and Contessa business, taking into account the rapidly-changing business environment posed by the COVID-19 pandemic, future regulations or government interventions, reduction in elective procedures, change in patient behavior and further decline in senior living occupancy and other issues that can potentially impact the company’s core business.
For 2021, the company anticipates net service revenues in the range of $2.200 billion to $2.205 billion, a drop from the earlier guidance of $2.230-$2.245. Adjusted earnings per share are projected in the range of $5.88-$5.93, a decline from the prior guidance of $6.37-$6.49.
The Zacks Consensus Estimate for 2021 revenues is pegged at $2.25 billion. The Zacks Consensus Estimate for adjusted earnings per share is pegged at $6.09.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -19.69% due to these changes.
VGM Scores
Currently, Amedisys has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Amedisys has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.