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Here's Why You Should Retain AMN HealthCare Stock in Your Portfolio
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AMN Healthcare Services, Inc. (AMN - Free Report) is well-poised for growth in the coming quarters, courtesy of its broad array of services. The optimism led by increased demand for healthcare services and the Managed Services Program (MSP) is expected to drive further growth. However, healthcare industry regulations and stiff competition are major downsides.
Shares of this Zacks Rank #3 (Hold) company have lost 48.7% year to date against the industry's 2% growth. The S&P 500 Index has gained 20% in the said time frame.
This renowned player in the healthcare total talent services space has a market capitalization of $1.46 billion. The company projects 5.9% earnings growth for fiscal 2025 and expects to witness continued improvements in its business. AMN Healthcare surpassed the Zacks Consensus Estimate in all the trailing four quarters, delivering an average earnings surprise of 15%.
Image Source: Zacks Investment Research
Factors Favoring AMN Stock
Broad Array of Services: AMN Healthcare's performance is driven by its evolution from traditional staffing to a comprehensive total talent solutions partner. The company offers a wide range of workforce solutions, including staffing, MSPs, VMS, labor analytics, consulting, telehealth, and credentialing services.
Recent innovations, like the ShiftWise Flex platform and AMN Passport app, optimize workforce management and enhance efficiency for clients. Strategic initiatives, such as the launch of Strategic Partnership Solutions for language services in August, and the expanded use of its market Insights tool, are helping clients optimize staffing and recruitment efforts. These solutions position AMN Healthcare to meet diverse, growing healthcare talent needs.
Healthcare MSP: AMN Healthcare's MSP is a key driver of its market success, enhancing workforce planning efficiency and patient care. In the second quarter of 2024, MSP revenues accounted for 45% of consolidated revenues, with significant contributions to nurse and allied solutions (69%), physician and leadership solutions (14%), and technology and workforce solutions (3%).
For the first half of 2024, MSP revenues comprised 47% of consolidated revenues, reinforcing its critical role in AMN's growth and performance. This strong MSP presence is a vital factor in AMN's overall success, particularly in staffing and workforce management.
Demand for Healthcare Services: AMN Healthcare’s performance is driven by growing demand for healthcare services, fueled by demographic shifts, healthcare expenditure increases and the aftermath of the COVID-19 pandemic. In the United States, the population over 65 is expected to grow 30% by 2030, significantly increasing healthcare needs, particularly in hospitals and skilled nursing facilities. This aging demographic challenges labor supply as more clinicians retire, intensifying demand for AMN’s services.
The pandemic heightened demand, especially in the nurse and allied solutions segment, and management expects this elevated demand to persist due to labor shortages and deferred care. Our model estimates AMN’s Physician & Leadership Solutions and Technology & Workforce Solutions segments to witness a 9.7% and 5.5% CAGR, respectively, from 2023 to 2026. These factors indicate sustained growth opportunities for AMN Healthcare.
Downsides
Healthcare Industry Regulations: AMN Healthcare faces risks from regulatory changes and reimbursement policies that could indirectly affect demand and pricing. Noncompliance by hospital clients may lead to penalties, reducing their ability to pay. Additionally, changes in government policies could impact AMN's state and federal agency clients, affecting profitability and growth.
Stiff Competition: AMN Healthcare faces intense competition from national and regional firms, as well as hospital systems with in-house recruitment. Despite its strong infrastructure and certifications, rivals like CHG Healthcare and Aya Healthcare challenge its nurse and allied staffing business, potentially limiting growth and affecting profitability.
Estimate Trend
AMN Healthcare has been witnessing a positive estimate revision trend for 2024. Over the past 60 days, the Zacks Consensus Estimate for its earnings per share has improved 3.5% to $3.26.
The Zacks Consensus Estimate for third-quarter 2024 revenues and earnings per share is pegged at $670.01 million and 63 cents, respectively, suggesting a 21.5% and 68% decline from the year-ago reported numbers.
Some top-ranked stocks in the broader medical space are Tenet HealthCare(THC - Free Report) , ATI Physical Therapy (ATIP - Free Report) and Aveanna Healthcare (AVAH - Free Report) . While Tenet HealthCare sports a Zacks Rank #1 (Strong Buy), ATI Physical Therapy and Aveanna Healthcare carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tenet HealthCare has an estimated long-term growth rate of 18.3%. THC's earnings surpassed estimates in each of the trailing four quarters, with the average being 58.5%.
Tenet HealthCare has gained 119.9% compared with the industry's 48.6% growth year to date.
ATI Physical Therapy's earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 7.25%.
ATIP's shares have gained 5.5% year to date compared with the industry’s 18.6% growth.
Aveanna Healthcare's earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 47.5%.
AVAH's shares have surged 104.5% year to date compared with the industry’s 15.7% growth.
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Here's Why You Should Retain AMN HealthCare Stock in Your Portfolio
AMN Healthcare Services, Inc. (AMN - Free Report) is well-poised for growth in the coming quarters, courtesy of its broad array of services. The optimism led by increased demand for healthcare services and the Managed Services Program (MSP) is expected to drive further growth. However, healthcare industry regulations and stiff competition are major downsides.
Shares of this Zacks Rank #3 (Hold) company have lost 48.7% year to date against the industry's 2% growth. The S&P 500 Index has gained 20% in the said time frame.
This renowned player in the healthcare total talent services space has a market capitalization of $1.46 billion. The company projects 5.9% earnings growth for fiscal 2025 and expects to witness continued improvements in its business. AMN Healthcare surpassed the Zacks Consensus Estimate in all the trailing four quarters, delivering an average earnings surprise of 15%.
Image Source: Zacks Investment Research
Factors Favoring AMN Stock
Broad Array of Services: AMN Healthcare's performance is driven by its evolution from traditional staffing to a comprehensive total talent solutions partner. The company offers a wide range of workforce solutions, including staffing, MSPs, VMS, labor analytics, consulting, telehealth, and credentialing services.
Recent innovations, like the ShiftWise Flex platform and AMN Passport app, optimize workforce management and enhance efficiency for clients. Strategic initiatives, such as the launch of Strategic Partnership Solutions for language services in August, and the expanded use of its market Insights tool, are helping clients optimize staffing and recruitment efforts. These solutions position AMN Healthcare to meet diverse, growing healthcare talent needs.
Healthcare MSP: AMN Healthcare's MSP is a key driver of its market success, enhancing workforce planning efficiency and patient care. In the second quarter of 2024, MSP revenues accounted for 45% of consolidated revenues, with significant contributions to nurse and allied solutions (69%), physician and leadership solutions (14%), and technology and workforce solutions (3%).
For the first half of 2024, MSP revenues comprised 47% of consolidated revenues, reinforcing its critical role in AMN's growth and performance. This strong MSP presence is a vital factor in AMN's overall success, particularly in staffing and workforce management.
Demand for Healthcare Services: AMN Healthcare’s performance is driven by growing demand for healthcare services, fueled by demographic shifts, healthcare expenditure increases and the aftermath of the COVID-19 pandemic. In the United States, the population over 65 is expected to grow 30% by 2030, significantly increasing healthcare needs, particularly in hospitals and skilled nursing facilities. This aging demographic challenges labor supply as more clinicians retire, intensifying demand for AMN’s services.
The pandemic heightened demand, especially in the nurse and allied solutions segment, and management expects this elevated demand to persist due to labor shortages and deferred care. Our model estimates AMN’s Physician & Leadership Solutions and Technology & Workforce Solutions segments to witness a 9.7% and 5.5% CAGR, respectively, from 2023 to 2026. These factors indicate sustained growth opportunities for AMN Healthcare.
Downsides
Healthcare Industry Regulations: AMN Healthcare faces risks from regulatory changes and reimbursement policies that could indirectly affect demand and pricing. Noncompliance by hospital clients may lead to penalties, reducing their ability to pay. Additionally, changes in government policies could impact AMN's state and federal agency clients, affecting profitability and growth.
Stiff Competition: AMN Healthcare faces intense competition from national and regional firms, as well as hospital systems with in-house recruitment. Despite its strong infrastructure and certifications, rivals like CHG Healthcare and Aya Healthcare challenge its nurse and allied staffing business, potentially limiting growth and affecting profitability.
Estimate Trend
AMN Healthcare has been witnessing a positive estimate revision trend for 2024. Over the past 60 days, the Zacks Consensus Estimate for its earnings per share has improved 3.5% to $3.26.
The Zacks Consensus Estimate for third-quarter 2024 revenues and earnings per share is pegged at $670.01 million and 63 cents, respectively, suggesting a 21.5% and 68% decline from the year-ago reported numbers.
AMN Healthcare Services Inc Price
AMN Healthcare Services Inc price | AMN Healthcare Services Inc Quote
Key Picks
Some top-ranked stocks in the broader medical space are Tenet HealthCare (THC - Free Report) , ATI Physical Therapy (ATIP - Free Report) and Aveanna Healthcare (AVAH - Free Report) . While Tenet HealthCare sports a Zacks Rank #1 (Strong Buy), ATI Physical Therapy and Aveanna Healthcare carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tenet HealthCare has an estimated long-term growth rate of 18.3%. THC's earnings surpassed estimates in each of the trailing four quarters, with the average being 58.5%.
Tenet HealthCare has gained 119.9% compared with the industry's 48.6% growth year to date.
ATI Physical Therapy's earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 7.25%.
ATIP's shares have gained 5.5% year to date compared with the industry’s 18.6% growth.
Aveanna Healthcare's earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 47.5%.
AVAH's shares have surged 104.5% year to date compared with the industry’s 15.7% growth.