What Happened?
Shares of healthcare staffing company AMN Healthcare Services (NYSE:AMN) fell 5% in the afternoon session after analyst firm BMO Capital lowered its price target on the stock to $22.00 from $27.00. The price target reduction from BMO Capital followed AMN's second-quarter earnings report, where the company issued third-quarter revenue guidance below consensus expectations. AMN projects its Q3 revenue to fall between 9% and 11% compared to the prior year. Management attributed the weaker outlook to an “uncertain healthcare policy environment” and macroeconomic volatility, which has caused clients to slow down decision-making. BMO Capital noted that healthcare staffing volumes have been negatively impacted, particularly at Academic Medical Centers that depend on federal funding. While AMN's second-quarter results had surpassed estimates, the soft forward guidance prompted the more cautious analyst rating.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy AMN Healthcare Services? Access our full analysis report here, it’s free.
What Is The Market Telling Us
AMN Healthcare Services’s shares are very volatile and have had 27 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 20 days ago when the stock gained 6% on the news that Truist Securities reiterated its 'Buy' rating on the company. The Wall Street firm pointed to a potential recovery in the international travel nursing segment as a key driver for future growth. An analyst at Truist noted that improvements in the visa process for healthcare professionals could provide a meaningful boost to AMN's performance. This comes after a significant drop in employment-based (EB) visa recipients in recent years, which has impacted the availability of international nurses. While forecasting the international business remains challenging, Truist sees the potential for recovery in this area as a source of upside for the company.
AMN Healthcare Services is down 32.5% since the beginning of the year, and at $16.57 per share, it is trading 69.4% below its 52-week high of $54.15 from August 2024. Investors who bought $1,000 worth of AMN Healthcare Services’s shares 5 years ago would now be looking at an investment worth $310.18.
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