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Reasons to Add AMN Healthcare (AMN) Stock to Your Portfolio
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AMN Healthcare Services, Inc. (AMN - Free Report) has been gaining on the back of its broad array of services. A solid performance in the first quarter of 2022 and its key buyouts also raise optimism regarding the stock. However, stiff competition and the consolidation of healthcare delivery units are major downsides.
Over the past year, this Zacks Rank #1 (Strong Buy) stock has gained 6.7% against a 63.6% fall of the industry and a 4.4% decline of the S&P 500.
The renowned player in the healthcare total talent services space has a market capitalization of $4.25 billion. The company projects 1.1% growth for the next five years and expects to witness continued improvements in its business.
AMN Healthcare surpassed the Zacks Consensus Estimate in all the trailing four quarters, delivering an earnings surprise of 15.6%, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strong Q1 Results: AMN Healthcare’s better-than-expected results in first-quarter 2022 buoy our optimism. The company recorded robust performances across each of its core segments, along with a surge in its top and bottom lines in the quarter. Per management, a tight labor market has created record-high demand in many areas of the company’s business, which is encouraging. The expansion of the adjusted operating margin also bodes well for the stock.
Acquisitions: AMN Healthcare has lately been strengthening its inorganic portfolio through a string of acquisitions, raising our optimism. This month, the company acquired Connetics USA. The buyout is expected to expand AMN Healthcare’s International Staffing business and is expected to enable AMN Healthcare to add more qualified professionals to its international pipeline of nurses and allied professionals.
The buyouts of Synzi, Stratus Video (now known as AMN Language Services) and b4health are other notable acquisitions of AMN Healthcare.
Broad Array of Services: We are upbeat about its business’ gradual evolution beyond traditional healthcare staffing. The company has become a strategic total talent solutions partner for its clients. AMN Healthcare has expanded its portfolio to serve a diverse and growing set of healthcare talent-related needs.
The company’s suite of healthcare workforce solutions includes Managed Services Programs, vendor management systems (“VMS”) and medical language interpretation services.
AMN Healthcare has also displayed strength in digital health capabilities with its AMN Passport and AMN Cares. The company expanded its scalable VMS solution, enabling a wide array of healthcare facilities to quickly staff and manage their entire range of contingent talent.
Downsides
Stiff Competition: In the nurse and allied healthcare staffing business, AMN Healthcare competes with a few national players beside numerous smaller, regional and local companies. Some of the leading competitors vary by segment. When recruiting healthcare professionals, in addition to other executive search and staffing firms, AMN Healthcare competes with hospital systems that have developed their recruitment departments.
Consolidation of Healthcare Delivery Units: Healthcare delivery organizations are consolidating, providing them with greater leverage in negotiating pricing for services. Consolidations may also result in AMN Healthcare losing its ability to work with certain clients because the party acquiring or consolidating with its client may have a previously established service provider they opt to maintain.
Estimate Trend
AMN Healthcare has been witnessing an upward estimate revision trend for 2022. Over the past 90 days, the Zacks Consensus Estimate for its earnings per share has moved 13.1% north to $10.46.
The Zacks Consensus Estimate for second-quarter 2022 revenues is pegged at $1.37 billion, suggesting a 59.7% rise from the year-ago reported number.
Other Key Picks
A few other top-ranked stocks in the broader medical space are Patterson Companies, Inc. (PDCO - Free Report) , Veeva Systems Inc. (VEEV - Free Report) and Alkermes plc (ALKS - Free Report) .
Patterson Companies, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 9.9%. PDCO’s earnings surpassed estimates in three of the trailing four quarters and missed the same in the other, the average beat being 2.7%.
Patterson Companies has lost 3.1% against the industry’s 2.5% growth in the past year.
Veeva Systems has an estimated long-term growth rate of 18.1%. VEEV’s earnings surpassed estimates in the trailing four quarters, the average beat being 9.6%. It currently carries a Zacks Rank #2.
Veeva Systems has lost 41.6% compared with the industry’s 58.9% fall over the past year.
Alkermes, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 25.1%. ALKS’s earnings surpassed estimates in the trailing four quarters, the average beat being 350.5%.
Alkermes has gained 33.1% against the industry’s 38.3% fall over the past year.
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Reasons to Add AMN Healthcare (AMN) Stock to Your Portfolio
AMN Healthcare Services, Inc. (AMN - Free Report) has been gaining on the back of its broad array of services. A solid performance in the first quarter of 2022 and its key buyouts also raise optimism regarding the stock. However, stiff competition and the consolidation of healthcare delivery units are major downsides.
Over the past year, this Zacks Rank #1 (Strong Buy) stock has gained 6.7% against a 63.6% fall of the industry and a 4.4% decline of the S&P 500.
The renowned player in the healthcare total talent services space has a market capitalization of $4.25 billion. The company projects 1.1% growth for the next five years and expects to witness continued improvements in its business.
AMN Healthcare surpassed the Zacks Consensus Estimate in all the trailing four quarters, delivering an earnings surprise of 15.6%, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strong Q1 Results: AMN Healthcare’s better-than-expected results in first-quarter 2022 buoy our optimism. The company recorded robust performances across each of its core segments, along with a surge in its top and bottom lines in the quarter. Per management, a tight labor market has created record-high demand in many areas of the company’s business, which is encouraging. The expansion of the adjusted operating margin also bodes well for the stock.
Acquisitions: AMN Healthcare has lately been strengthening its inorganic portfolio through a string of acquisitions, raising our optimism. This month, the company acquired Connetics USA. The buyout is expected to expand AMN Healthcare’s International Staffing business and is expected to enable AMN Healthcare to add more qualified professionals to its international pipeline of nurses and allied professionals.
The buyouts of Synzi, Stratus Video (now known as AMN Language Services) and b4health are other notable acquisitions of AMN Healthcare.
Broad Array of Services: We are upbeat about its business’ gradual evolution beyond traditional healthcare staffing. The company has become a strategic total talent solutions partner for its clients. AMN Healthcare has expanded its portfolio to serve a diverse and growing set of healthcare talent-related needs.
The company’s suite of healthcare workforce solutions includes Managed Services Programs, vendor management systems (“VMS”) and medical language interpretation services.
AMN Healthcare has also displayed strength in digital health capabilities with its AMN Passport and AMN Cares. The company expanded its scalable VMS solution, enabling a wide array of healthcare facilities to quickly staff and manage their entire range of contingent talent.
Downsides
Stiff Competition: In the nurse and allied healthcare staffing business, AMN Healthcare competes with a few national players beside numerous smaller, regional and local companies. Some of the leading competitors vary by segment. When recruiting healthcare professionals, in addition to other executive search and staffing firms, AMN Healthcare competes with hospital systems that have developed their recruitment departments.
Consolidation of Healthcare Delivery Units: Healthcare delivery organizations are consolidating, providing them with greater leverage in negotiating pricing for services. Consolidations may also result in AMN Healthcare losing its ability to work with certain clients because the party acquiring or consolidating with its client may have a previously established service provider they opt to maintain.
Estimate Trend
AMN Healthcare has been witnessing an upward estimate revision trend for 2022. Over the past 90 days, the Zacks Consensus Estimate for its earnings per share has moved 13.1% north to $10.46.
The Zacks Consensus Estimate for second-quarter 2022 revenues is pegged at $1.37 billion, suggesting a 59.7% rise from the year-ago reported number.
Other Key Picks
A few other top-ranked stocks in the broader medical space are Patterson Companies, Inc. (PDCO - Free Report) , Veeva Systems Inc. (VEEV - Free Report) and Alkermes plc (ALKS - Free Report) .
Patterson Companies, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 9.9%. PDCO’s earnings surpassed estimates in three of the trailing four quarters and missed the same in the other, the average beat being 2.7%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Patterson Companies has lost 3.1% against the industry’s 2.5% growth in the past year.
Veeva Systems has an estimated long-term growth rate of 18.1%. VEEV’s earnings surpassed estimates in the trailing four quarters, the average beat being 9.6%. It currently carries a Zacks Rank #2.
Veeva Systems has lost 41.6% compared with the industry’s 58.9% fall over the past year.
Alkermes, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 25.1%. ALKS’s earnings surpassed estimates in the trailing four quarters, the average beat being 350.5%.
Alkermes has gained 33.1% against the industry’s 38.3% fall over the past year.