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Will Amedisys' (AMED) Q3 Earnings Reflect Overall Gain?

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Amedisys, Inc. (AMED - Free Report) is scheduled to report third-quarter 2018 results after the market closes on Oct 29.

Last reported quarter, the company’s earnings per share surpassed the Zacks Consensus Estimate by 28.2%. Moreover, the company delivered positive surprises in two of the trailing four quarters, the average beat being 11.6%.

Let’s see, how things are shaping up prior to this announcement.

Factors at Play

Similar to the prior reported quarter, we are upbeat about solid contributions from Amedisys’ all three lines of business, which comprise Home Health, Hospice and Personal Care. In the second quarter, the company generated around 71% of its total revenues from Home Health.

Within Home Health, the company is making improvements in same-store total volume expansion via increased admissions and re-certifications. This is turn, drives further growth for the company. Amedisys has continued to focus on Medicare fee for service growth, which has been increasing sequentially for the last five quarters. We expect this trend to have possibly continued through the third quarter of 2018 as well.

Amedisys, Inc. Price and EPS Surprise

Amedisys, Inc. Price and EPS Surprise | Amedisys, Inc. Quote

We are also looking forward to the company’s Hospice segment that generated 24% of the company’s total revenues in the second quarter. Infact, with increase in reimbursement of approximately $1 million, this business has further got a boost. The company is currently focusing on expanding its hospice assets by means of strategic tuck-in acquisitions and rewarding deals.

Notably, the hospice segment recently experienced significant growth, which is quantified by its current average daily census (ADC). In the earlier reported quarter, ADC grew 12% to 7,554 while admissions were up 7%. Both are impressive numbers given the year-over-year comps that the hospice business generates.

Within Personal Care, over the last few quarters, the company has been emphasizing on scale improvement and expansion in business, both organically and inorganically. Last reported quarter, it announced the buyout of Bring Care Home, a personal care provider in Northeastern Massachusetts. In the previously reported quarter, the company registered growth of 31% including the result of two integrations completed since the second quarter of 2017. We expect all these factors to aid Amedisys’ third-quarter performance strongly.

Here’s What Our Quantitative Model Predicts

Per the proven Zacks model, a company with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has good chances of beating estimates if it also has a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Amedisys sports a Zacks Rank of 1, which increases the predictive power of ESP. However, it has an Earnings ESP of -3.83%, which leaves surprise prediction inconclusive. The combination fails to suggest a likely earnings beat for Amedisys.

Stocks Worth a Look

Here are a few medical stocks worth considering with the right combination of elements to beat on earnings in the upcoming quarterly releases.

Baxter International Inc (BAX - Free Report) has an Earnings ESP of +0.90% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Masimo Corporation (MASI - Free Report) has an Earnings ESP of +0.98% and a Zacks Rank of 2.

Luminex Corporation has an Earnings ESP of +54.76% and a Zacks Rank #3.

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