Here's Why You Should Add AMN Healthcare to Your Portfolio
AMN Healthcare Services, Inc. AMN is gaining on strength in Healthcare Managed Services Program, prudent buyouts and a solid staffing services portfolio.
The company, with a market capitalization of $2.57 billion, is a leading travel healthcare staffing company. The company anticipates earnings improvement of 12.3% over the next year. Also, this Zacks Rank #2 (Buy) company has a trailing four-quarter earnings surprise of 8.9%, on average.
In the past month, the stock has rallied 20.5% compared with the 11.1% growth of its industry.
Let’s delve deeper into the factors working in favor of the company.
Progress in Healthcare Managed Services Program (“MSP”): AMN Healthcare’s unique MSP is helping the company gain market traction. Notably, it helps streamline the entire workforce planning process, which facilitates the delivery of improved patient care. This has resulted in a large network of improved patient care and efficiency.
It is encouraging to note that by the end of 2019, AMN Healthcare won new MSPs and expanded several existing MSP relationships amounting above $150 million. Apart from this, the company’s pipeline looks promising with eight new clients, which will boost its portfolio.
Since mid-March, the company has deployed more than 10,000 health care professionals through AMN brands, its MSP and VMS affiliate partners and marketplace technology solutions. Within the Nurse and Allied segment, the company’s first-quarter revenue mix in its MSP business was 70% while the same for the second quarter has been projected at around 75%.
Benefits From Acquisitions: AMN Healthcare has lately been gaining from a string of acquisitions. In recent past, the company announced the buyouts of MedPartners, a leading national mid-revenue cycle firm, and two related brands in healthcare leadership solutions — Phillips DiPisa and Leaders For Today. The MedPartners buyout continues to be accretive to AMN Healthcare’s Workforce Solutions unit .
In the first quarter, Technology and Workforce Solutions segment revenues registered 84% year-over-year growth, primarily attributable to the company’s recent acquisitions of b4health and Stratus Video. The company’s newly-acquired language interpretation business, Stratus Video, accounted for $14 million of revenues in the quarter.
In April 2020, the company inked a partnership with Randstad US to deliver the first comprehensive suite of workforce solutions for the healthcare community. These solutions address needs like direct patient care, allied services, and professional and technical support. The partnership is expected to boost AMN Healthcare’s Other Workforce Solutions segment.
Strength in Staffing Service: AMN Healthcare’s staffing services have been instrumental in driving its top line. The Nurse and Allied Solutions and Other Workforce Solutions units offer services like travel nurse staffing, allied staffing, rapid response nurse staffing and others.
In the first quarter of 2020, the Nurse and Allied Solutions segment’s revenues grew 14% year over year on 12% year-over-year growth in Travel Nurse division revenues and 41% rise in the Allied division.
Estimates Trend
The Zacks Consensus Estimate for the company’s second-quarter 2020 revenues is pegged at $559.9 million, suggesting a 4.6% rise from the year-ago reported number. The same for earnings is pegged at 63 cents, suggesting a fall of 18.2% from the year-ago reported number.
Other Key Picks
A few other top-ranked stocks from the broader medical space are Laboratory Corporation of America Holdings LH, Surmodics SRDX and Quest Diagnostics DGX.
LabCorp’s long-term earnings growth rate is estimated at 6.1%. The company presently sportsa Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Surmodics’ long-term earnings growth rate is estimated at 10%. The company presently carries a Zacks Rank #2 .
Quest Diagnostics’ long-term earnings growth rate is estimated at 7.6%. It currently carries a Zacks Rank #1.
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With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
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