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Why Is AMN Healthcare (AMN) Up 2.5% Since Last Earnings Report?

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It has been about a month since the last earnings report for AMN Healthcare Services (AMN). Shares have added about 2.5% 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 its most recent earnings report in order to get a better handle on the important drivers.

AMN Healthcare Q4 Earnings and Revenues Top Estimates

AMN Healthcare Services Increported fourth-quarter 2020 adjusted earnings per share of $1, beating the Zacks Consensus Estimate of 89 cents by 12.4%.The bottom line also improved 17.6% year over year.

For 2020, adjusted earnings per share was $3.43, beating the Zacks Consensus Estimate by 3%. The figure also grew 7.9% year over year.

Revenues

For the fourth quarter, revenues of $631.3 million surpassed the Zacks Consensus Estimate by 0.9%. On a year-over-year basis, revenues rose 7.8%.

For 2020, revenues came in at $2.39 billion, in line with the Zacks Consensus Estimate. On a year-over-year basis, revenues grew 7.7%.

Segment Details

In the fourth quarter of 2020, the Nurse and Allied Solutions segment’s revenues totaled $448 million, up 6% year over year.Travel nurse staffing revenues grew 23% year over year. However, Allied division revenues fell 13% year over year.

The Physician and Leadership Solutions segment’s revenues totaled $111 million, down 20% year over year. This downside was due to a 12% decline in Locum tenens revenues,  a 29% drop in Interim leadership revenues and a 33% fall in physician and leadership search businesses.

The Technology and Workforce Solutions segment’s revenues totaled $72 million, up 192% year over year. The language interpretation business revenues grew 29% year over year.

Margin

In the fourth quarter, gross profit totaled $207.5 million, up 5.3% year over year. As a percentage of revenues, gross margin was 32.9%, contracting 71 basis point (bps).

Adjusted operating profit in the quarter was $52.3 million, down 18.2%. As a percentage of revenues, adjusted operating margin was 8.3%, down  261 bps.

Cash Position

The company exited the fourth quarter with cash and cash equivalents o$29.2 million compared with $82.9 million at the end of the year-ago period.

Cumulative net cash provided by operating activities came in at $256.8 million, up from $224.9 million a year ago.

Guidance

For the first quarter of 2021, AMN Healthcare expects revenues in the range of $800-$820 million. The Zacks Consensus Estimate for the same stands at $606 million.

With respect to the Nurse and Allied Solutions segment, the company expects revenues to grow around 40% from the prior-year figure.

In the first quarter, the Technology and Workforce Solutions segment’srevenues are expected to fall almost 5% from the prior-year figure.The company projects first-quarter revenues at the Physician and Leadership Solutions segment to improve almost 100% from the prior-year figure.

Operating margin is expected at 10.3-10.7% while gross margin is estimated within 31.5-32%.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 69.05% due to these changes.

VGM Scores

At this time, AMN Healthcare has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, AMN Healthcare has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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