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3 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 second quarter of 2022 and its key buyouts raise optimism regarding the stock. However, healthcare industry regulations and the consolidation of healthcare delivery units are major downsides.
So far this year, this Zacks Rank #1 (Strong Buy) stock has lost 15% compared with a 35% fall of the industry and a 23.2% decline of the S&P 500.
The renowned player in the healthcare total talent services space has a market capitalization of $4.5 billion. The company projects 3.2% 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 15.7%, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Acquisitions: AMN Healthcare has lately been strengthening its inorganic portfolio through a string of acquisitions, raising our optimism. In May, the company acquired Connetics USA, which expanded its international nurse business beyond contract staffing.
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. The company’s suite of healthcare workforce solutions includes Managed Services Programs, vendor management systems (VMS) and medical language interpretation services.
AMN Healthcare also displayed strength in digital health capabilities with its AMN Passport and AMN Cares. The company has expanded its scalable VMS solution, enabling a wide array of healthcare facilities to quickly staff and manage their entire range of contingent talent.
Strong Q2 Results: AMN Healthcare’s better-than-expected results in second-quarter 2022 buoy our optimism. The company recorded robust performance across each of its core segments, along with a surge in its top and bottom lines in the quarter. Per management, the company witnessed robust demand for staffing and other services, significantly higher than the pre-pandemic levels, raising our optimism. The expansion of the adjusted operating margin also bodes well for the stock.
Downsides
Healthcare Industry Regulations: The healthcare industry is subject to extensive and complex federal and state laws and regulations. AMN Healthcare provides talent solutions and technologies on a contractual basis to its clients who pay the company directly. Accordingly, Medicare, Medicaid and insurance reimbursement policy changes generally do not directly impact the company. Nevertheless, reimbursement changes in government programs, particularly Medicare and Medicaid, can and do indirectly affect the demand and the prices paid for the company’s services.
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 60 days, the Zacks Consensus Estimate for its earnings per share has moved 8.2% north to $11.16.
The Zacks Consensus Estimate for third-quarter 2022 revenues is pegged at $1.09 billion, suggesting a 24.7% rise from the year-ago reported number.
Some other top-ranked stocks in the broader medical space are ShockWave Medical (SWAV - Free Report) , McKesson (MCK - Free Report) and Semler Scientific . While ShockWave Medical sports a Zacks Rank #1 (Strong Buy), McKesson and Semler Scientific carry a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Estimates for ShockWave Medical have improved from earnings of $10.41 to $11.26 for 2022 and $7.94 to $8.30 for 2023 in the past 60 days. SWAV stock has gained 41.4% so far this year.
ShockWave Medical delivered an earnings surprise of 180.1%, on average, in the last four quarters.
McKesson’s earnings per share estimates increased from $23.26 to $24.25 for fiscal 2023 and $25.41 to $26.04 for fiscal 2024 in the past 60 days. MCK has gained 38.1% so far this year.
McKesson delivered an earnings surprise of 13.00%, on average, in the last four quarters.
Estimates for Semler Scientific’s earnings per share increased from $1.37 to $1.58 for 2022 and $2.39 to $2.42 for 2023 in the past 60 days. SMLR has declined 59.9% so far this year.
Semler Scientific has an earnings yield of 4% against a negative yield for the industry.
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3 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 second quarter of 2022 and its key buyouts raise optimism regarding the stock. However, healthcare industry regulations and the consolidation of healthcare delivery units are major downsides.
So far this year, this Zacks Rank #1 (Strong Buy) stock has lost 15% compared with a 35% fall of the industry and a 23.2% decline of the S&P 500.
The renowned player in the healthcare total talent services space has a market capitalization of $4.5 billion. The company projects 3.2% 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 15.7%, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Acquisitions: AMN Healthcare has lately been strengthening its inorganic portfolio through a string of acquisitions, raising our optimism. In May, the company acquired Connetics USA, which expanded its international nurse business beyond contract staffing.
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. The company’s suite of healthcare workforce solutions includes Managed Services Programs, vendor management systems (VMS) and medical language interpretation services.
AMN Healthcare also displayed strength in digital health capabilities with its AMN Passport and AMN Cares. The company has expanded its scalable VMS solution, enabling a wide array of healthcare facilities to quickly staff and manage their entire range of contingent talent.
Strong Q2 Results: AMN Healthcare’s better-than-expected results in second-quarter 2022 buoy our optimism. The company recorded robust performance across each of its core segments, along with a surge in its top and bottom lines in the quarter. Per management, the company witnessed robust demand for staffing and other services, significantly higher than the pre-pandemic levels, raising our optimism. The expansion of the adjusted operating margin also bodes well for the stock.
Downsides
Healthcare Industry Regulations: The healthcare industry is subject to extensive and complex federal and state laws and regulations. AMN Healthcare provides talent solutions and technologies on a contractual basis to its clients who pay the company directly. Accordingly, Medicare, Medicaid and insurance reimbursement policy changes generally do not directly impact the company. Nevertheless, reimbursement changes in government programs, particularly Medicare and Medicaid, can and do indirectly affect the demand and the prices paid for the company’s services.
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 60 days, the Zacks Consensus Estimate for its earnings per share has moved 8.2% north to $11.16.
The Zacks Consensus Estimate for third-quarter 2022 revenues is pegged at $1.09 billion, suggesting a 24.7% rise from the year-ago reported number.
AMN Healthcare Services Inc Price
AMN Healthcare Services Inc price | AMN Healthcare Services Inc Quote
Other Key Picks
Some other top-ranked stocks in the broader medical space are ShockWave Medical (SWAV - Free Report) , McKesson (MCK - Free Report) and Semler Scientific . While ShockWave Medical sports a Zacks Rank #1 (Strong Buy), McKesson and Semler Scientific carry a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Estimates for ShockWave Medical have improved from earnings of $10.41 to $11.26 for 2022 and $7.94 to $8.30 for 2023 in the past 60 days. SWAV stock has gained 41.4% so far this year.
ShockWave Medical delivered an earnings surprise of 180.1%, on average, in the last four quarters.
McKesson’s earnings per share estimates increased from $23.26 to $24.25 for fiscal 2023 and $25.41 to $26.04 for fiscal 2024 in the past 60 days. MCK has gained 38.1% so far this year.
McKesson delivered an earnings surprise of 13.00%, on average, in the last four quarters.
Estimates for Semler Scientific’s earnings per share increased from $1.37 to $1.58 for 2022 and $2.39 to $2.42 for 2023 in the past 60 days. SMLR has declined 59.9% so far this year.
Semler Scientific has an earnings yield of 4% against a negative yield for the industry.