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

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Zacks Equity Research
·4 min read
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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 rallied 7.3% against the industry’s decline of 15.2% over the past three months.

AMN Healthcare with a market capitalization of $3.43 billion is a travel healthcare staffing company. It has a trailing four-quarter earnings surprise of 15.7%, on average. Further, it anticipates earnings to improve 6.1% over the next five years.

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

Progress of Healthcare MSP: This project is helping the company 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 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 gradually evolved beyond traditional healthcare staffing. Notably, the company became 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 the fourth quarter of 2020, VMS business grew revenues 31% year over year with 19% organic growth. This indicated a swift rebound from the previous quarters’ tally. Growth in this segment was driven by the same trend that boosted the company’s strong Nursing and Allied performance.

Broad Array of Services: AMN Healthcare’s business gradually evolved beyond traditional healthcare staffing.

The AMN Telehealth platform including Stratus for language interpretation gained a significant momentum through 2020. The company’s Language interpretation volumes grew about 30% year over year in 2020, and the momentum continues with the first-quarter 2021 volumes projected to be up at least 35% year over year. Additionally, the company integrated its language services into the AMN Televate school platform to provide interpretation for students and clinicians.

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 pose a huge competitive threat to the company. This, in turn, is likely to substantially dent its margins.

Which Way Are Estimates Headed?

For 2021, the Zacks Consensus Estimate for revenues is pegged at $2.80 billion, indicating growth of 17.1% from the prior-year reported figure. The same for adjusted earnings per share stands at $4.17, suggesting a rise of 21.6% from the year-ago reported figure.

Stocks to Consider

Some better-ranked stocks from the broader medical space are Align Technology ALGN, Abbott Laboratories ABT and Hologic HOLX. While Align Technology currently sports a Zacks Rank #1 (Strong Buy), the other two presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Align Technology has a projected long-term earnings growth rate of 19%.

Abbott has a projected long-term earnings growth rate of 14.1%.

Hologic has an estimated long-term earnings growth rate of 15.4%.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>


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