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Will Hospice Strength Show on Amedisys' (AMED) Q4 Earnings?

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Amedisys, Inc. (AMED - Free Report) is scheduled to report fourth-quarter and 2018 results, after markets close on Feb 27.

In the last reported quarter, the company’s earnings per share surpassed the Zacks Consensus Estimate by 23.4%. Moreover, the company delivered positive surprises in three of the trailing four quarters, the average beat being 16.55%.

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

Factors at Play

We are upbeat about solid contributions from the company’s business lines — Home Health, Hospice and Personal Care. In the third quarter, the company generated around 70.7% of total revenues from Home Health.

Within Home Health, the company is looking to boost same-store volumes via increased admissions and re-certifications. Amedisys also continues to focus on Medicare fee for service growth, which has been increasing sequentially over the last six quarters. PPS (prospective payment system) has also continued to demonstrate strong growth in revenue per episode.

In the third quarter of 2018, total episodic volume growth was 5% and same-store admission growth was 4%. Banking on the company’s quality rating, increased employment of business development staff, analytical means and innovative payment models, the company expects to maintain the growth trajectory in the fourth quarter.

Amedisys, Inc. Price and EPS Surprise

 

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

Meanwhile, the Hospice segment generated 24.8% of total revenues in the third quarter. In fact, an increased reimbursement of approximately $1 million has boosted this business. The company is currently focusing on expanding its hospice assets by means of tuck-in acquisitions and big deals.

The Hospice segment recently experienced significant growth, which is quantified by its current average daily census (ADC). In the last reported quarter, ADC grew 11% to 7,768 while admissions were up 8%. Based on the recent developments, we expect fourth-quarter results to show organic and inorganic growth in the business.

From Personal Care, the company generated 4.6% of total revenues, which rose 38.7% year over year, in the third quarter. Last October, the company closed two major buyouts under the segment — Bring Care Home in Northeastern Massachusetts and the eighth largest hospice organization, Compassionate Care Hospice, in the United States. We expect these acquisitions to have driven Amedisys’ fourth-quarter top line significantly.

Here’s What Our Quantitative Model Predicts

Per the proven model, a company with a 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 0.00%. The combination fails to suggest earnings beat for Amedisys this earnings season.

Stocks Worth a Look

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

AC Immune SA (ACIU - Free Report) has an Earnings ESP of +86.79% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Aduro Biotech has an Earnings ESP of +15.23% and a Zacks Rank #2.

Aptose Biosciences (APTO - Free Report) has an Earnings ESP of +7.69% and a Zacks Rank #3.

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