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Amedisys Rides on Hospice Arm Expansion Amid Coronavirus Woes

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On Jun 22, we issued an updated research report on Amedisys, Inc. (AMED - Free Report) . The stock currently carries a Zacks Rank #3 (Hold).

This renowned home health and hospice services provider has outperformed its industry over the past six months. The stock has gained 22.7% against 4.1% decline of the industry in the said time frame.

The company noted that the COVID-19-led economic mayhem has had a mixed impact on the company’s business. Before the second week of March, Amedisys witnessed a decline in referral volumes and an increase in MIS visits. Beginning the second week of March, the company started to see a drop in MIS visits while witnessing steady recovery in referral volumes in all lines of businesses.

In hospice, while referrals hit a low, admission volumes have significantly improved. The company has already started to see signs of progress in episodes since March. Although the impact of COVID-19 ultimately led to increased lupus and lost building periods in this population (the full impact is expected in the second quarter), the company is confident that it can achieve its target improvements to mitigate the impact of behavioral assumptions once COVID-19 subsides.

Meanwhile, we note that, Amedisys is currently exploring opportunities in Home Health and Hospice segments. Amedisys has been benefiting from the recent acquisitions of hospice care providers — Asana Hospice, RoseRock Healthcare and Compassionate Care Hospice (CCH).

However, elevated operating expenses and a declining gross margin continue to raise concerns. Further, an intensely competitive landscape and reimbursement woes weigh on the home health and hospice industry.

Key Picks

A few top-ranked stocks from the broader medical space are Quest Diagnostics Incorporated (DGX - Free Report) , Hologic, Inc. (HOLX - Free Report) and QIAGEN N.V. (QGEN - Free Report) .

Quest Diagnostics’ long-term earnings growth rate is projected at 7.6%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Hologic’s long-term earnings growth rate is estimated at 7%. The company presently has a Zacks Rank #2.

QIAGEN’s long-term earnings growth rate is estimated at 12.2%. It currently sports a Zacks Rank #1.

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