We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Retain Amedisys (AMED) Stock For Now
Read MoreHide Full Article
Amedisys, Inc. (AMED - Free Report) has been gaining from the robust performance by the Home Health and Hospice segments. The company ended the fourth quarter of 2021 with better-than-expected results. Its strategic collaborations and buyout also buoy optimism. However, a weak margin scenario and tough competition raise concerns.
Over the past year, the Zacks Rank #3 (Hold) stock has declined 40.2% against a 42.5% fall of the industry and a 9.8% rise of the S&P 500.
The renowned home health and hospice services provider has a market capitalization of $5.33 billion. Amedisys’ earnings for the fourth quarter of 2021 surpassed the Zacks Consensus Estimate by 0.9%.
Over the past five years, Amedisys’ earnings grew 27.3%, way ahead of the industry and S&P 500’s 12.7% and 2.8% increase, respectively. The company projects 11% growth for the next five years compared with the industry and the S&P 500’s projected growth rate of 13.4% and 11.4%, respectively.
Image Source: Zacks Investment Research
Let’s delve deeper.
Factors at Play
Personal Care Prospects Bright: Amedisys is currently working on expanding the geographical presence of the Personal Care business through inorganic expansion. The company is integrating tuck-in acquisitions like Bring Care Home, East Tennessee Personal Care Services and Intercity. Apart from this, the company’s deal with ClearCare creates an opportunity to establish a partnership between Amedisys and Personal Care agencies.
At present, Amedisys operates 12 personal-care care centers in Massachusetts and one personal-care care center in Florida and Tennessee.
Strategic Acquisitions and Partnerships to Add Value: We are upbeat about Amedisys’ slew of strategic acquisitions and collaborations. In November 2021, Amedisys’ company, Contessa, entered into a collaboration with Penn State Health and Highmark Health. This joint venture will run Penn State Health Home Recovery Care to deliver all the important features of hospital and skilled nursing care to patients in the comfort of their homes.
Meanwhile, in October 2021, Amedisys acquired the regulatory assets of a home health provider that would enable the company to open home health care centers to fully serve and expand the Charlotte and Raleigh markets in North Carolina.
Impressive Q4 Results: Amedisys ended the fourth quarter with better-than-expected earnings and revenues. The Home Health and Hospice segments drove the top line in the reported quarter on growth in Medicare and Non-Medicare revenues. The net service revenue contributions from Contessa Health in the fourth quarter seem encouraging. Further, increased Licensed Practical Nurse and Physical Therapist Assistant utilization buoys optimism. A strong solvency position is another upside.
Downsides
Declining Length of Stay: For the fourth quarter, Amedisys’ hospice discharge average length of stay fell to 90.3 days from 94.5 days, while the median length of stay decreased to 22.7 days from 24.3 days, compared to the previously-reported quarter. The decline in the length of stay has a direct impact on the Hospice segment’s performance.
Pressure on Margins Remains: Amedisys’ escalating costs and expenses resulted in a contraction of both margins, building pressure on its bottom line. During the fourth quarter, gross margin contracted 101 basis points (bps) to 43.3%, while adjusted operating margin fell 237 bps to 11.3% from the prior-year level.
Competitive Landscape: The market for home health and hospice is fragmented with a number of small local providers. With few barriers to entry in this market, Amedisys primarily faces tough competition from local privately and publicly-owned and hospital-owned healthcare providers.
Estimate Trend
Over the past 30 days, the Zacks Consensus Estimate for Amedisys’ 2022 earnings has moved down by 1.5% to $5.31.
The Zacks Consensus Estimate for the company’s 2022 revenues is pegged at $2.36 billion, suggesting a 6.37% rise from the 2021 reported number.
Key Picks
A few better-ranked stocks in the broader medical space are Owens & Minor, Inc. (OMI - Free Report) , NextGen Healthcare, Inc. and McKesson Corporation (MCK - Free Report) .
Owens & Minor has a long-term earnings growth rate of 8.8%. Owens & Minor’s earnings surpassed estimates in the trailing four quarters, delivering a surprise of 29.5%, on average. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Owens & Minor has outperformed the industry over the past year. OMI has gained 9.3% against a 15.9% industry decline in the said period.
NextGen has an estimated long-term growth rate of 5%. NextGen’s earnings surpassed estimates in the trailing four quarters, the average surprise being 17.5%. It currently carries a Zacks Rank #2.
NextGen has outperformed the industry over the past year. NXGN has gained 17.4% compared with the industry’s 38.2% fall over the past year.
McKesson has a long-term earnings growth rate of 11.8%. McKesson’s earnings surpassed estimates in the trailing four quarters, delivering a surprise of 20.6%, on average. It presently carries a Zacks Rank #2.
McKesson has outperformed the industry over the past year. MCK has gained 64.5% in the said period compared with 9.3% growth of the industry.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Here's Why You Should Retain Amedisys (AMED) Stock For Now
Amedisys, Inc. (AMED - Free Report) has been gaining from the robust performance by the Home Health and Hospice segments. The company ended the fourth quarter of 2021 with better-than-expected results. Its strategic collaborations and buyout also buoy optimism. However, a weak margin scenario and tough competition raise concerns.
Over the past year, the Zacks Rank #3 (Hold) stock has declined 40.2% against a 42.5% fall of the industry and a 9.8% rise of the S&P 500.
The renowned home health and hospice services provider has a market capitalization of $5.33 billion. Amedisys’ earnings for the fourth quarter of 2021 surpassed the Zacks Consensus Estimate by 0.9%.
Over the past five years, Amedisys’ earnings grew 27.3%, way ahead of the industry and S&P 500’s 12.7% and 2.8% increase, respectively. The company projects 11% growth for the next five years compared with the industry and the S&P 500’s projected growth rate of 13.4% and 11.4%, respectively.
Image Source: Zacks Investment Research
Let’s delve deeper.
Factors at Play
Personal Care Prospects Bright: Amedisys is currently working on expanding the geographical presence of the Personal Care business through inorganic expansion. The company is integrating tuck-in acquisitions like Bring Care Home, East Tennessee Personal Care Services and Intercity. Apart from this, the company’s deal with ClearCare creates an opportunity to establish a partnership between Amedisys and Personal Care agencies.
At present, Amedisys operates 12 personal-care care centers in Massachusetts and one personal-care care center in Florida and Tennessee.
Strategic Acquisitions and Partnerships to Add Value: We are upbeat about Amedisys’ slew of strategic acquisitions and collaborations. In November 2021, Amedisys’ company, Contessa, entered into a collaboration with Penn State Health and Highmark Health. This joint venture will run Penn State Health Home Recovery Care to deliver all the important features of hospital and skilled nursing care to patients in the comfort of their homes.
Meanwhile, in October 2021, Amedisys acquired the regulatory assets of a home health provider that would enable the company to open home health care centers to fully serve and expand the Charlotte and Raleigh markets in North Carolina.
Impressive Q4 Results: Amedisys ended the fourth quarter with better-than-expected earnings and revenues. The Home Health and Hospice segments drove the top line in the reported quarter on growth in Medicare and Non-Medicare revenues. The net service revenue contributions from Contessa Health in the fourth quarter seem encouraging. Further, increased Licensed Practical Nurse and Physical Therapist Assistant utilization buoys optimism. A strong solvency position is another upside.
Downsides
Declining Length of Stay: For the fourth quarter, Amedisys’ hospice discharge average length of stay fell to 90.3 days from 94.5 days, while the median length of stay decreased to 22.7 days from 24.3 days, compared to the previously-reported quarter. The decline in the length of stay has a direct impact on the Hospice segment’s performance.
Pressure on Margins Remains: Amedisys’ escalating costs and expenses resulted in a contraction of both margins, building pressure on its bottom line. During the fourth quarter, gross margin contracted 101 basis points (bps) to 43.3%, while adjusted operating margin fell 237 bps to 11.3% from the prior-year level.
Competitive Landscape: The market for home health and hospice is fragmented with a number of small local providers. With few barriers to entry in this market, Amedisys primarily faces tough competition from local privately and publicly-owned and hospital-owned healthcare providers.
Estimate Trend
Over the past 30 days, the Zacks Consensus Estimate for Amedisys’ 2022 earnings has moved down by 1.5% to $5.31.
The Zacks Consensus Estimate for the company’s 2022 revenues is pegged at $2.36 billion, suggesting a 6.37% rise from the 2021 reported number.
Key Picks
A few better-ranked stocks in the broader medical space are Owens & Minor, Inc. (OMI - Free Report) , NextGen Healthcare, Inc. and McKesson Corporation (MCK - Free Report) .
Owens & Minor has a long-term earnings growth rate of 8.8%. Owens & Minor’s earnings surpassed estimates in the trailing four quarters, delivering a surprise of 29.5%, on average. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Owens & Minor has outperformed the industry over the past year. OMI has gained 9.3% against a 15.9% industry decline in the said period.
NextGen has an estimated long-term growth rate of 5%. NextGen’s earnings surpassed estimates in the trailing four quarters, the average surprise being 17.5%. It currently carries a Zacks Rank #2.
NextGen has outperformed the industry over the past year. NXGN has gained 17.4% compared with the industry’s 38.2% fall over the past year.
McKesson has a long-term earnings growth rate of 11.8%. McKesson’s earnings surpassed estimates in the trailing four quarters, delivering a surprise of 20.6%, on average. It presently carries a Zacks Rank #2.
McKesson has outperformed the industry over the past year. MCK has gained 64.5% in the said period compared with 9.3% growth of the industry.