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On Tuesday, Benchmark reiterated a Hold rating on AMN Healthcare (NYSE:AMN), reflecting a cautious optimism as the company navigates a normalizing macroeconomic environment. According to InvestingPro analysis, AMN appears significantly undervalued at its current price of $25.57, despite showing a notable 16.47% gain over the past week. The firm’s analyst noted that most of AMN’s business units are demonstrating greater stability entering 2025, with trends in travel nurse utilization and bill rates approaching normal levels.
AMN Healthcare, a leading healthcare staffing company with annual revenue of $2.98 billion, has seen its clients manage wage pressures, which have risen by 5% in the fourth quarter, by reducing average hours worked. This measure has reached a 12-year low for travelers. Despite these pressures, the analyst pointed out that the value proposition of temporary versus permanent staff is becoming apparent again as demand shows signs of improvement. InvestingPro subscribers can access 8 additional key insights about AMN’s financial health and growth prospects.
The fourth quarter results for AMN Healthcare exceeded guidance, attributed mainly to higher-than-expected strike revenue, which positively impacted adjusted EBITDA. Additionally, there has been an uptick in order flow for Allied and Locum tenens divisions. Management is optimistic that, with international headwinds easing, sequential trends are expected to turn positive in the second half of 2025.
The analyst’s commentary suggests that while there are positive signs, they are adopting a wait-and-see approach before changing their stance. They anticipate further evidence of the improving trends in the upcoming weeks. For now, Benchmark’s position remains unchanged as they continue to observe AMN Healthcare’s performance from the sidelines.
In other recent news, AMN Healthcare reported its fourth-quarter 2024 earnings, revealing a revenue of $735 million, which exceeded the forecast of $694.36 million. The company’s adjusted earnings per share (EPS) was $0.75, significantly higher than the expected $0.49. Despite a 21% year-over-year decline in full-year revenue to $3 billion, AMN Healthcare managed to surpass analyst expectations. The company attributed part of its revenue success to labor disruption revenue in its Nurse and Allied Solutions segment. JMP Securities maintained a Market Outperform rating for AMN Healthcare, though it slightly adjusted the price target from $34 to $33 following the earnings report.
The company’s adjusted EBITDA for the quarter was $75 million, marking a 28% decrease from the previous year but still above expectations. AMN Healthcare also achieved a gross margin of 29.8%, which, despite a sequential decline, exceeded the high end of its guidance. The company launched several technology platforms, including the Shiftwise Flex (NASDAQ:FLEX) VMS platform and the Passport app, to bolster its service offerings. Furthermore, AMN Healthcare paid down $250 million in revolver debt throughout 2024, reflecting its strategic focus on financial stability. Looking ahead, the company provided a consolidated revenue guidance of $660-$680 million for the first quarter of 2025, anticipating growth in specific segments despite international challenges.
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