A month has gone by since the last earnings report for Amedisys (AMED - Free Report) . Shares have added about 18.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Amedisys due for a pullback? 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 drivers.
Amedisys reported earnings per share (EPS) of $1 in the second quarter of 2018, up 61.2% from the year-ago adjusted EPS of 62 cents. The bottom line also remained well ahead of the Zacks Consensus Estimate of 78 cents.
Second-quarter net service revenues grossed $411.6 million, up 9.8% year over year. Moreover, the top line also beat the Zacks Consensus Estimate of $404 million.
Quarter in Detail
Within the company's Home Health division, net service revenues totaled $291.5 million in the second quarter, reflecting a 7.8% improvement year over year. Medicare revenues of $206.3 million rose 4% year over year while non-Medicare revenues improved 18.3% year over year to $72 million.
Within the Hospice division, net service revenues grossed $101.4 million (up 12.3% year over year) including Medicare revenues of $96.9 million (up 12.9%) and non-Medicare revenues of $4.5 million (flat year over year).
Recently, the company integrated two additional operating segments within its business, namely Personal Care and Corporate.
At Personal Care, net service revenues totaled $18.7 million, representing a 30.8% surge from the year-ago number. Meanwhile, the Corporate segment did not register any revenues till the end of the second quarter.
The company’s gross margin contracted 11 basis points (bps) to 41.1% in the quarter under review despite a 9.5% gain in gross profit. Expense on salaries and benefits rose 3% to $77.2 million. Other expenses inched up 1.2% to $42.1 million. Adjusted operating income of $49.7 million in the reported quarter reflects a 31.4% rise from the year-ago tally. Adjusted operating margin expanded 199 bps to 12.1% from the year-ago figure.
Amedisys exited the second quarter of 2018 with cash and cash equivalents of $25.9 million compared with $120 million at the end of the first quarter. The company's long-term obligations (excluding current portion) were $123.9 million at the end of the second quarter compared with $75.8 million at the end of the first quarter. Net cash provided by operating activities in the first half of 2018 was $50.7 million compared with $36.2 million in the year-ago period.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
Currently, Amedisys has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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.
Our style scores indicate that the stock is more suitable for growth investors than momentum investors.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Amedisys has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.