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Amedisys (AMED) Down 9.3% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Amedisys (AMED - Free Report) . Shares have lost about 9.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Amedisys due for a breakout? 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 catalysts.

Amedisys Gains Ground on Solid Home Health Arm in Q1

Amedisys reported adjusted earnings per share (EPS) of $1.11 in the first quarter of 2019, showing a 40.5% jump from the year-ago figure. The bottom line beat the Zacks Consensus Estimate of 89 cents by 24.7%.

Net service revenues grossed $467.3. million, up 17% year over year. Moreover, the top line beat the Zacks Consensus Estimate by 1.4%.

Quarter in Detail

Within the company's Home Health division, net service revenues totaled $310.1 million in the quarter, reflecting a 9.2% improvement year over year. Medicare revenues of $213.4 million rose 4.1% year over year while non-Medicare revenues improved 22.3% to $96.7 million.

Within the Hospice division, net service revenues grossed $137 million (up 40.8% year over year), including Medicare revenues of $130.7 million (up 42.4%) and non-Medicare revenues of $6.3 million (up 14.5%).

The company integrated two additional operating segments within its business, namely, Personal Care and Corporate. At Personal Care, net service revenues totaled $20.2 million, representing a 12.8% rise from the year-ago number. Meanwhile, the Corporate segment did not register any revenue in the first quarter .

Margins

Gross margin expanded 79 basis points (bps) to 41.1 % in the quarter under review. Expense on salaries and benefits rose 25.4% to $94.8 million. Other expenses rose 4.1% to $43.4 million. Adjusted operating profit of $53.8 million in the reported quarter reflects a 23.4% rise from the year-ago tally. Adjusted operating margin expanded 59 bps to 11.5% from a year ago.

Cash Position

Amedisys exited first-quarter 2019 with cash and cash equivalents of $10.6 million compared with $20.2 million at the end of 2018. The company's long-term obligations (excluding current portion) were $303.7 million at the end of the quarter compared with $5.7 million at the end of 2018. Net cash provided by operating activities was $20.1million at the end of the first quarter of 2019, compared with $40.3 million at the end of the year-ago quarter.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -6.42% due to these changes.

VGM Scores

Currently, Amedisys has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Amedisys has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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