Back to top

Image: Bigstock

Amedisys Rides on New Buyouts, Strength in Personal Care Arm

Read MoreHide Full Article

On Jun 26, we issued an updated research report on Amedisys, Inc. (AMED - Free Report) . The stock carries a Zacks Rank #2 (Buy).

Shares of this renowned home health and hospice services provider have outperformed the broader industry over the past three months. The stock has surged 40.3% against the 18.4% decline of the industry.

At the Home Health and Hospice divisions, Amedisys is witnessing encouraging growth in Medicare and non-Medicare revenues. The company is currently exploring opportunities in these segments.

In this regard, Amedisys recently acquired the hospice care provider RoseRock Healthcare. This apart, with the acquisition of Compassionate Care Hospice, Amedisys now has ADC (average daily census) of 9,982, making it the third largest Hospice organization in the country. We are also impressed by the company’s solid performance in the recently-launched Personal Care segment. A favorable demographic trend and strategic buyouts bode well too.

Of late, the company integrated a new operating segment into its Personal Care business. During the reported quarter, net service revenues totaled $20 million with total hours per quarter growing approximately 11%. Per management, this segment is stabilizing and performing per expectation.

Notably, Amedisys is currently focusing on improving its clinical quality. On this front, its 2019 STARs score preview by Center for Medicare and Medicaid Services (CMS) puts it on average of 4.27 stars. The company now has 52 care centers rated at 5 stars with 94% of the overall portfolio rated at 4 stars or better. Patient satisfaction average, per the last evaluation, was 3.96. This outperformed the industry average of 3.70. Amedisys is targeting to achieve a 4.0 Quality Star Rating for all its care centers.

However, escalating operating expenses are a persistent overhang. Also, an intense competitive landscape and regulatory concerns prevail in the home health and hospice industry.

Other Key Picks

A few other top-ranked stocks in the broader medical space are DENTSPLY SIRONA (XRAY - Free Report) , Penumbra (PEN - Free Report) and CONMED Corporation (CNMD - Free Report) , each carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

DENTSPLY’s long-term earnings growth rate is expected to be 11.5%.

Penumbra’s long-term earnings growth rate is projected at 21.5%.

CONMED’s long-term earnings growth rate is estimated at 13.3%.

Will you retire a millionaire?

One out of every six people retires a multimillionaire. Get smart tips you can do today to become one of them in a new Special Report, “7 Things You Can Do Now to Retire a Multimillionaire.”

Click to get it free >>

Published in