A solid year-to-date return of 170.5%, robust third-quarter
2012 results and rising estimates aided
AMN Healthcare Services Inc.
) to attain a Zacks #1 Rank (Strong Buy) status on December 22,
2012. Shares of this healthcare staffing and clinical workforce
management solutions provider are now hovering close to its
52-week high of $12.17 attained on December 26.
The Rank Drivers
AMN Healthcare Services has outperformed the Zacks Consensus
Estimate in 5 out of the last 7 quarters, while it reported
in-line results in the remaining 2. Looking at the earnings
surprise trend over the last 7 quarters, AMN Healthcare has
topped estimates by an average of 117%, thereby justifying the
The company reported impressive third-quarter results on
November 1, wherein earnings of 12 cents per share beat the Zacks
Consensus Estimate by a couple of cents or 20% and surged 140%
from 5 cents earned in the prior-year quarter. The quarter's
earnings were aided by improving demand and constructive
implementation of strategy in its core staffing and recruitment
services and workforce solutions.
Consolidated revenue of $243.9 million surpassed the Zacks
Consensus Estimate of $239 million, and rose 7% year over year.
Sales increased in the Nurse and Allied Healthcare Staffing (up
13%) and Physician Permanent Placement Services segments (up 9%),
partly mitigated by a sales decline at Locum Tenens Staffing
segment (down 6%). Gross profit jumped 9% to $69.6 million,
whereas gross margin expanded 70 basis points to 28.5%.
Management now expects fourth quarter consolidated revenue
between $240 million and $244 million, reflecting year-over-year
growth of 8% to 10%. Gross margin is projected between 28% and
Impressive Estimates Revisions
The Zacks Consensus Estimate for 2012 rose 5.1% to 41 cents
per share on the back of upward revisions in all the 5 estimates
in the last 60 days. The current estimate implies a
year-over-year jump of 195.7%.
For 2013, 4 out of 5 estimates were revised higher over the
same time frame, lifting the Zacks Consensus Estimate by 8.2% to
53 cents per share. The current estimate suggests a
year-over-year increase of 29%.
AMN Healthcare Services currently trades at a forward P/E of
27.22x, reflecting a 43% premium to the peer group average of
19.04x. Also, on a price-to-book basis, the shares trade at
3.06x, a substantial premium to the peer group average of 2.19x.
However, on a price-to-sales basis, the stock trades at 0.54x, at
a discount to the peer group average of 0.69x. Given its strong
fundamentals, the premium valuation is justified, and is well
supported by long-term earnings growth projection of 14%.
Founded in 1985 and headquartered in San Diego, California,
AMN Healthcare Services offers healthcare recruitment and
clinical staff management solutions in the U.S., and operates
under three segments - Nurse and Allied Healthcare Staffing,
Locum Tenens Staffing and Physician Permanent Placement Services.
The company provides staffing solutions for hospitals and other
healthcare institutions, provides physicians on a temporary and
permanent basis, and offers a recruitment process outsourcing
program. The company has a market cap of $505.6 million, and
primarily competes with
Cross Country Healthcare, Inc.
On Assignment Inc.
AMN HLTHCR SVCS (AHS): Free Stock Analysis
ON ASSIGNMENT (ASGN): Free Stock Analysis
CROSS COUNTRY (CCRN): Free Stock Analysis
To read this article on Zacks.com click here.