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Why AMN Healthcare Services Inc. Is Soaring Today

By Brian Feroldi - Feb 19, 2016 at 3:36PM

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Investors bid up shares today after the company reported record quarterly results.

What: Shares of AMN Healthcare Services (AMN -2.36%) were up more than 12% as of 2:45 p.m. ET after the medical staffing company released a fourth-quarter earnings report full of good news.

So what: AMN looks like it had a terrific quarter as every financial number headed in the right direction. Revenue jumped 44% versus the same period a year ago to $402.6 million, which exceed the $386 million that Wall Street expected. Gross profit was up 56% to $131.8 million and net income more than doubled to $20.2 million. Those figures caused adjusted earnings per share to skyrocket to $0.47 per share for the quarter, up 104% when compared to the year-ago period and well ahead of the $0.41 that the pros were looking for. 

This report was so strong that traders were also bidding up shares of Cross Country Healthcare (CCRN 0.39%), another healthcare staffing provider, whose stock rallied more than 7% on an otherwise quiet day, even though investors won't get a look at how the company fared during the quarter until it reports its earning results on March 10, so it's hard to tell whether today's price action was justified.

Now what: It's likely that investors are breathing a sigh of relief from this earnings report as hospital stocks have been in the doghouse recently due to weak demand. For example, Community Health Systems (CYH -6.01%) stock plunged after it reported a poorly received quarterly report in which it said that it was experiencing "volume weakness" due to lower-than-expected emergency room visits and admissions during the quarter. That news likely caused some to fear that demand for AMN services might have waned during the period, but today's results show that was clearly not the case at all.

Looking ahead, AMN Healthcare Services' management team believes that the good times will continue as it is forecasting that first-quarter revenue will land between $444 million to $450 million. That's a far higher number than the $394 million that analysts were expecting, which is likely contributing to today's sharp share-price movement. The company expects that gross margin will be around 33%, and its adjusted EBITDA margin will be roughly 11.5%, which is in line with its just-reported quarter.

All in all, it was a wonderful report, so it's easy to see why the market was bidding up shares today.

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Stocks Mentioned

AMN Healthcare Services, Inc. Stock Quote
AMN Healthcare Services, Inc.
$109.71 (-2.36%) $-2.65
Community Health Systems, Inc. Stock Quote
Community Health Systems, Inc.
$3.75 (-6.01%) $0.24
Cross Country Healthcare, Inc. Stock Quote
Cross Country Healthcare, Inc.
$20.83 (0.39%) $0.08

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