On Sep 12, we issued an updated research report on Amedisys, Inc.AMED . The stock carries a Zacks Rank #2 (Buy).
This renowned home health and hospice services provider has been trading above the broader industry over the past three months. The stock has gained 1.7% as against the broader industry's 0.4% decline.
Amedisys' Personal Care segment has been stabilizing on the integration of the latest tuck-in acquisitions. Moreover, the company is upbeat about the bountiful prospects in this segment. With the recently-announced Intercity takeover, the company has closed a total of three personal care acquisitions since last September and is awaiting regulatory approval for the buyout of East Tennessee Personal Care Services.
Amedisys also plans to evolve from a traditional home health and hospice care company to one that is focused on bringing home a continuum of care. This is because the company intends to better serve patients and diversify sources of payment to lower dependence on Medicare. In this regard, the company saw a rise in non-Medicare revenues, while Medicare revenues declined at the Home Health division in the third quarter. At the Hospice division, the company recorded strong growth across all segments.
Also, a favorable 2018 Home Health Final Rule buoys optimism. According to a report by HEALTHCAREfirst, the 2018 Home Health Final Rule was finalized without the implementation of the Home Health Groupings Model (HHGM) scheduled for rollout in 2019.
Meanwhile, Amedisys is poised to benefit from the aging demographics of the U.S. population and the need for higher acuity patients in a home nursing environment. Furthermore, the company's strong cash balance position bolsters investors' confidence in the stock.
On the flip side, escalating operating expenses and declining gross margin continue raise concerns. Also, an intensely competitive landscape and regulatory concerns weigh on the home health and hospice industry.
Other Key Picks
Other top-ranked medical stocks are athenahealth, Inc. ATHN , Align Technology, Inc. ALGN and Luminex Corporation LMNX . Notably, athenahealth, Align Technology and Luminex sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
athenahealth has a long-term expected earnings growth rate of 22.3%. The stock has rallied roughly 22.6% over a year.
Align Technology has a long-term expected earnings growth rate of 28.9%. The stock has rallied 136.9% in a year.
Luminex has a long-term expected earnings growth rate of 16.3%. The stock has gained 5.9% over the past three months.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
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