AMN – Although management has concerns about near-term headwinds, market expectations are still too bearish, suggesting longer-term upside remains warranted

• AMN Healthcare Services, Inc. (AMN:USA) trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with an 18.2x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, and while management has concerns about operational issues in Locum Tenens, EBITDA margin growth, and demand for occupational therapists, industry tailwinds and the firm’s leadership position in its space support long-term outperformance and equity upside
• Specifically, management may lack confidence in their ability to sustain elevated EBITDA margin growth levels, and may be concerned about potential flu headwinds. Additionally, they may lack confidence in the sustainability of strong demand for occupational and speech therapists, and may be concerned about operational issues in their Locum Tenens Solutions segment
• That said, AMN only needs to sustain profitability near recently-improved levels to warrant upside, and industry tailwinds and the firm’s leadership position suggest this scenario is likely going forward