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3 Reasons to Retain AMN Healthcare (AMN) Stock in Your Portfolio
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AMN Healthcare Services, Inc. (AMN - Free Report) is well-poised for growth in the coming quarters, courtesy of its broad array of services. A solid fourth-quarter 2022 performance and its healthcare Managed Services Program ("MSP") raise optimism regarding the stock. However, healthcare industry regulations and the consolidation of healthcare delivery units are major downsides.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 17.4% compared with a 29.9% decline of the industry and an 9.8% fall of the S&P 500.
The renowned player in the healthcare total talent services space has a market capitalization of $3.41 billion. The company projects 3.3% 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 10.9%, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Broad Array of Services: We are upbeat about the company's business’ gradual evolution beyond traditional healthcare staffing. AMN Healthcare has become a strategic total talent solutions partner for its clients. The company’s suite of healthcare workforce solutions includes MSPs, vendor management systems and medical language interpretation services.
On the fourth-quarter earnings call in February, management confirmed that the company is continuing to invest in Digital First initiatives, such as AMN Passport.
Healthcare MSP: AMN Healthcare’s unique MSP is helping it gain market traction. Notably, the program helps streamline the entire workforce planning process, which facilitates the delivery of improved patient care. This has resulted in a large network of improved patient care and efficiency.
In 2022, AMN Healthcare had $5.3 billion in spend under management through its MSPs, and approximately 64% of its consolidated revenues flowed through MSP relationships.
Strong Q4 Results: AMN Healthcare recorded robust performance across the majority of its core segments in the fourth quarter of 2022. Management confirmed that high vacancies and voluntary turnover in healthcare are continuing to support the demand for AMN Healthcare’s total talent solutions. The expansion of the gross margin bodes well.
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, giving them greater leverage in negotiating service pricing. 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 a negative estimate revision trend for 2023 over the past 90 days. In the same timeframe, the Zacks Consensus Estimate for its earnings per share has moved 1.8% south to $8.28.
The Zacks Consensus Estimate for first-quarter 2023 revenues is pegged at $1.11 billion, suggesting a 28.6% decline from the year-ago reported number.
This compares to our first-quarter revenue estimate of $1.10 billion, suggesting a 29% plunge from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Hologic, Inc. (HOLX - Free Report) , Henry Schein, Inc. (HSIC - Free Report) and Avanos Medical, Inc. (AVNS - Free Report) .
Hologic, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 15.2%. HOLX’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 30.6%.
Hologic has gained 4% against the industry’s 16.8% decline in the past year.
Henry Schein, sporting a Zacks Rank #1 at present, has an estimated long-term growth rate of 8.1%. HSIC’s earnings surpassed estimates in three of the trailing four quarters and matched the same in the other, the average beat being 2.9%.
Henry Schein has lost 5.7% compared with the industry’s 4.9% decline over the past year.
Avanos, carrying a Zacks Rank #2 at present, has an estimated growth rate of 1.8% for 2023. AVNS’ earnings surpassed estimates in all the trailing four quarters, the average beat being 11%.
Avanos has lost 11.1% compared with the industry’s 16.8% decline over the past year.
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3 Reasons to Retain AMN Healthcare (AMN) Stock in Your Portfolio
AMN Healthcare Services, Inc. (AMN - Free Report) is well-poised for growth in the coming quarters, courtesy of its broad array of services. A solid fourth-quarter 2022 performance and its healthcare Managed Services Program ("MSP") raise optimism regarding the stock. However, healthcare industry regulations and the consolidation of healthcare delivery units are major downsides.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 17.4% compared with a 29.9% decline of the industry and an 9.8% fall of the S&P 500.
The renowned player in the healthcare total talent services space has a market capitalization of $3.41 billion. The company projects 3.3% 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 10.9%, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Broad Array of Services: We are upbeat about the company's business’ gradual evolution beyond traditional healthcare staffing. AMN Healthcare has become a strategic total talent solutions partner for its clients. The company’s suite of healthcare workforce solutions includes MSPs, vendor management systems and medical language interpretation services.
On the fourth-quarter earnings call in February, management confirmed that the company is continuing to invest in Digital First initiatives, such as AMN Passport.
Healthcare MSP: AMN Healthcare’s unique MSP is helping it gain market traction. Notably, the program helps streamline the entire workforce planning process, which facilitates the delivery of improved patient care. This has resulted in a large network of improved patient care and efficiency.
In 2022, AMN Healthcare had $5.3 billion in spend under management through its MSPs, and approximately 64% of its consolidated revenues flowed through MSP relationships.
Strong Q4 Results: AMN Healthcare recorded robust performance across the majority of its core segments in the fourth quarter of 2022. Management confirmed that high vacancies and voluntary turnover in healthcare are continuing to support the demand for AMN Healthcare’s total talent solutions. The expansion of the gross margin bodes well.
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, giving them greater leverage in negotiating service pricing. 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 a negative estimate revision trend for 2023 over the past 90 days. In the same timeframe, the Zacks Consensus Estimate for its earnings per share has moved 1.8% south to $8.28.
The Zacks Consensus Estimate for first-quarter 2023 revenues is pegged at $1.11 billion, suggesting a 28.6% decline from the year-ago reported number.
This compares to our first-quarter revenue estimate of $1.10 billion, suggesting a 29% plunge from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Hologic, Inc. (HOLX - Free Report) , Henry Schein, Inc. (HSIC - Free Report) and Avanos Medical, Inc. (AVNS - Free Report) .
Hologic, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 15.2%. HOLX’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 30.6%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic has gained 4% against the industry’s 16.8% decline in the past year.
Henry Schein, sporting a Zacks Rank #1 at present, has an estimated long-term growth rate of 8.1%. HSIC’s earnings surpassed estimates in three of the trailing four quarters and matched the same in the other, the average beat being 2.9%.
Henry Schein has lost 5.7% compared with the industry’s 4.9% decline over the past year.
Avanos, carrying a Zacks Rank #2 at present, has an estimated growth rate of 1.8% for 2023. AVNS’ earnings surpassed estimates in all the trailing four quarters, the average beat being 11%.
Avanos has lost 11.1% compared with the industry’s 16.8% decline over the past year.