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Why Is AMN Healthcare (AMN) Up 3.5% Since Last Earnings Report?

Zacks Equity Research

A month has gone by since the last earnings report for AMN Healthcare Services (AMN). Shares have added about 3.5% 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 the most recent earnings report in order to get a better handle on the important drivers.

AMN Healthcare Q4 Earnings and Revenues Beat Estimates

AMN Healthcare reported fourth-quarter 2019 adjusted EPS of 85 cents, which outpaced the Zacks Consensus Estimate of 74 cents. Also, the bottom line increased 4.9% year over year.

The company reported revenues worth $586.9 million, which surpassed the Zacks Consensus Estimate of $575.5 million. On a year-over-year basis, revenues increased 11%.

Segment Details

Nurse and Allied Solutions

In the fourth quarter of 2019, the segment’s revenues totaled $388.8 million, up 18.1% year over year.

Locum Tenens Solutions

The segment’s revenues amounted to $77.9 million, down 4.8% from the prior-year quarter’s figure.

Other Workforce Solutions

In the quarter under review, the segment’s revenues came in at $120.2 million, up 2.3% year over year.

Margin

In the third quarter, gross profit totaled $197.1 million, up 14.3% year over year. As a percentage of revenues, gross margin was 33.6%, which expanded 100 basis points (bps).

Total operating expenses in the quarter were $150.2 million, up 22.8% year over year. Operating income in the quarter was $27.5 million, down 22.8%. As a percentage of revenues, operating margin was 4.7%, down 200 bps.

Guidance

For the first quarter of 2020, AMN Healthcare expects revenues in the range of $598-$605 million.

Gross margin is expected in the range of 33.3-33.5%, while operating margin is projected between 6.8% and 7%.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a flat path over the past two months.

VGM Scores

At this time, AMN Healthcare has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

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

Outlook

AMN Healthcare has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.



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