AMN Healthcare Shares Rise on Improved 4Q Revenue Guidance

Shares of AMN Healthcare Services advanced about 2% in Tuesday’s pre-market trading as the company increased its revenue outlook for the fourth quarter of 2020 based on preliminary financial information.

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AMN Healthcare (AMN), which provides recruitment solutions to US healthcare organizations, now expects its fourth-quarter revenue to be in the range of $623 million-$628 million, compared to the previously issued outlook of $575 million-$585 million. The company raised its guidance based on “strong” demand for its services across all three reportable segments (Nurse and Allied Solutions, Physician and Leadership Solutions, and Technology and Workforce Solutions) as indicated by management’s initial assessment of its operations.

The company said that business was particularly strong in the Nurse and Allied Solutions segment. It had earlier disclosed that the demand for nurses was at record highs due to the impact of the pandemic.

Meanwhile, AMN expects its fourth quarter operating margin and adjusted EBITDA margin to be at the high end of its previously issued outlook of 7.6%-8.1% and 13.3%-13.8%, respectively. (See AMN stock analysis on TipRanks)

Following the company’s better-than-anticipated 3Q results in November, Truist Financial analyst Tobey Sommer increased the price target on AMN to $78 from $68 and maintained a Buy rating. The analyst expects subpar full-time nurse labor availability in 2021, which he believes will drive greater hospital dependence on temporary labor, thus fueling demand for AMN’s services. Sommer also increased his FY20 and FY21 EPS forecast by $0.40 and $0.20 to $3.25 and $2.93, respectively.

Overall, 4 unanimous Buys add up to the Street’s Strong Buy analyst consensus for AMN Healthcare. The average price target stands at $76, indicating an upside potential of 8.1% in the 12 months ahead. Shares have gained 12.2% over the past year.