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Amedisys (AMED) Up 24.8% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Amedisys (AMED - Free Report) . Shares have added about 24.8% 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 catalysts.

Amedisys Q3 Earnings Top Estimates

Amedisys reported adjusted earnings per share of $1.15 in the third quarter of 2019, up 21.1% from the year-ago figure. The bottom line also beat the Zacks Consensus Estimate of 97 cents by 27.8%.

Net service revenues grossed $494.6 million, up 18.5% year over year. Meanwhile, the top line marginally matched the Zacks Consensus Estimate.

Quarter in Detail

Within the company's Home Health division, net service revenues totaled $311.5 million in the quarter, reflecting a 5.6% improvement year over year. Moreover, Medicare revenues of $211.5 million rose a mere 2% year over year, driven by lowered Medicare recertification rate and an increase in price concessions. Non-Medicare revenues improved 15.1% to $100 million.

Within the Hospice division, net service revenues were $162.4 million (up 57.1% year over year) including Medicare revenues of $153.5 million (up 56.7%) and non-Medicare revenues of $8.9 million (up 64.8%).

The company recently integrated two additional operating segments within its business, namely, Personal Care and Corporate. At Personal Care, net service revenues totaled $20.7 million, representing an 8.9% rise from the year-ago number. Meanwhile, the Corporate segment did not register any revenues in the third quarter.

Margins

Gross margin expanded 147 basis points (bps) to 41.6% in the quarter under review. Further, expense on salaries and benefits rose 25.9% to $99.9 million. Other expenses increased 20.2% to $48.5 million as well. Meanwhile, adjusted operating profit of $57.5 million reflects a 20.1% rise from the year-ago tally. Adjusted operating margin also expanded 15 bps to 11.6% from the prior-year level.

Cash Position

Amedisys exited the September quarter with cash and cash equivalents of $20.7 million compared with $13.9 million at the end of the second quarter. The company's long-term obligations (excluding current portion) were $231.6 million at the end of the third quarter compared with $266.5 million at the end of the second quarter. However, year-to-date net cash provided by operating activities was $126.8 million compared with $159.5 million a year ago.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

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. Following the exact same course, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Amedisys has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.


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