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Here's Why You Should Retain AMN Healthcare (AMN) Stock Now

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AMN Healthcare Services, Inc. AMN is well poised for growth on the back of a broad range of services, and its Healthcare Managed Services Program (MSP). However, stiff competition in the industry remains a concern.

The stock has gained 12.9%, compared with the industry’s growth of 17.7% over the past three months. Further, the S&P 500 Index rallied 16.2% in the same time frame.

AMN Healthcare — with a market capitalization of $3.55 billion — is a travel healthcare staffing company. It has a trailing four-quarter earnings surprise of 16.4%, on average. Further, it anticipates earnings to improve 5.7% over the next five years.

Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #3 (Hold).

What’s Weighing on the Stock?

AMN Healthcare faces stiff competition in the industry it operates in. Notably, a large number of providers of healthcare recruiting and internet-based learning and research solutions for training present a significant competitive threat to the company. This, in turn, is likely to significantly impact its margins.

Key Catalysts

AMN Healthcare’s unique Healthcare MSP is helping it gain market traction. Notably, the program helps streamline the entire workforce planning process, which facilitates delivery of enhanced patient care.

Since mid-March, the company has deployed more than 10,000 health care professionals through AMN brands, its MSP and vendor management system (VMS) affiliate partners, and marketplace technology solutions.

AMN Healthcare’s business has gradually evolved beyond traditional healthcare staffing. Notably, the company has become a strategic workforce solutions partner with its clients. Its service portfolio includes vendor management systems, MSP, predictive labor analytics, workforce optimization technology and consulting, clinical labor scheduling, recruitment process outsourcing, mid-revenue cycle management and credentialing software services.

In June 2020, the company introduced a customizable, technology-enabled and clinically based service for businesses and other organizations that want to ensure health and safety of their employees as they slowly return to workspaces. This new solution is likely to provide a boost to the company’s Technology and Workforce Solutions segment.

Which Way are Estimates Headed?

For 2021, the Zacks Consensus Estimate for revenues is pegged at $2.37 billion, indicating a decline of 0.3% from the prior year. The same for adjusted earnings per share stands at $3.30, suggesting a dip of 0.2% from the year-ago reported figure.

Stocks to Consider

Some better-ranked stocks from the broader medical space are DENTSPLY SIRONA Inc. XRAY, Patterson Companies, Inc. PDCO and IDEXX Laboratories, Inc. IDXX, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

DENTSPLY has a projected long-term earnings growth rate of 7.4%.

Patterson Companies has an estimated long-term earnings growth rate of 9.6%.

IDEXX Laboratories has a projected long-term earnings growth rate of 15.8%.

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