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Why Is AMN Healthcare (AMN) Up 28.2% Since Last Earnings Report?

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A month has gone by since the last earnings report for AMN Healthcare Services (AMN - Free Report) . Shares have added about 28.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is AMN Healthcare due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

AMN Healthcare  Q1 Earnings In Line With Estimates

AMN Healthcare Services Inc. reported first-quarter 2020 adjusted earnings per share  of 79 cents, in line with the Zacks Consensus Estimate. The bottom line increased 5.3% year over year.

Revenues of $602.5 million surpassed the Zacks Consensus Estimate by 0.1%. On a year-over-year basis, revenues increased 13.2%.

Segment Details

In the first quarter of 2020, the Nurse and Allied Solutions segment’s revenues totaled $424.3 million, up 14% year over year and 3% on an organic basis. This was driven by 12% year-over-year growth in the Travel Nurse division revenues and a 41% rise in the Allied division. 

The Physician and Leadership Solutions segment’s revenues totaled $137.8million, up 0.6% year over year.

Technology and Workforce Solutions segment revenues came in at $40.3 million, up 84% year over year and 13% on an organic basis, primarily attributable to the company’s recent acquisitions of b4health and Stratus Video.

Margin

In the first quarter, gross profit totaled $202.1 million, up 14.3% year over year. As a percentage of revenues, gross margin was 33.5%, expanding 34 basis points (bps).

Adjusted operating profit in the quarter was $55.8 million, down 1.6%. As a percentage of revenues, adjusted operating margin was 9.3%, down 139 bps.

Guidance

For the second quarter of 2020, AMN Healthcare expects revenues in the range of $550-$570million.

Operating margin is expected above 6%, while adjusted EBITDA margin is expected to cross 12%.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -24.78% due to these changes.

VGM Scores

At this time, AMN Healthcare has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% 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. It's no surprise AMN Healthcare has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.


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