With a growing population and rising rates of chronic conditions, the demand for better healthcare solutions has gone through the roof. Hence, investors could scoop up shares of Amedisys, Inc. (AMED), Aveanna Healthcare Holdings Inc. (AVAH), and National HealthCare Corporation (NHC), which are actively enhancing patient care.
Chronic diseases are becoming more prevalent worldwide, leading to a surge in demand for innovative treatments for conditions like heart disease, diabetes, and cancer. Healthcare providers and pharmaceutical companies are doing their best to keep up with the increasing need for effective solutions.
In this context, artificial intelligence (AI) and the Internet of Medical Things (IoMT) in consumer health applications are already helping people. AI is being used to detect diseases, such as cancer, more accurately and in their early stages. Additionally, their integration into applications is encouraging healthier behavior in individuals.
According to a report by Deloitte, more than 70% of C-suite executives across five countries reported that improving operational efficiencies and productivity gains will be priorities for their organizations this year. This showcases the industry's cooperation to meet the industry's needs and aid in the treatment of a greater percentage of the population.
Moreover, in line with all these positive trends, a study by SNS Insider Research points out that the healthcare market is expected to reach $44.76 trillion by 2032, growing at a CAGR of 9.1%.
Now, let us dive deep into the fundamentals of three Medical - Services stocks, starting with #3.
Stock #3: Amedisys, Inc. (AMED)
AMED provides healthcare services offering a range of services in the homes of individuals for the recovery of patients from surgery, chronic disability, or terminal illness. The company has three segments: Home Health; Hospice; and High Acuity Care.
On August 21, 2024, AMED’s subsidiary, Contessa Health, secured a spot to participate in a new Medicare alternative payment model designed to support people living with dementia and their caregivers by the Centers for Medicare & Medicaid Services. The move introduces a new approach to how Medicare will pay for the care of people living with dementia and provide them with a better quality of life.
For the fiscal 2024 third quarter that ended September 30, 2024, AMED’s net service revenue increased 5.7% year-over-year to $587.67 million. Its operating income amounted to $30.33 million.
Additionally, adjusted net income attributable to AMED and adjusted net income per share attributable to AMED stockholders rose 3.2% and 2% from the prior year’s quarter to $33.24 million and $1, respectively.
Analysts expect AMED’s revenue and EPS for the fiscal 2024 fourth quarter, which ended in December 2024, to increase 5.5% and 12.7% year-over-year to $602.38 million and $1.06, respectively. Also, the company has surpassed the consensus revenue estimates in three of the four trailing quarters.
AMED’s stock has surged 2.5% over the past three months, closing the last trading session at $92.55.
AMED’s POWR Ratings reflect its sound fundamentals. The stock has an overall rating of B, translating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
AMED has a B grade for Growth and Quality. Within the Medical - Services industry, it is ranked #16 out of 63 stocks.
Click here to access AMED’s Value, Sentiment, Momentum, and Stability ratings.
Stock #2: Aveanna Healthcare Holdings Inc. (AVAH)
AVAH is a diversified home care platform company that provides pediatric and adult healthcare services. The company’s patient-centered care delivery platform helps patients to reduce high-cost care spending and stay in their homes. It has three segments: Private Duty Services (PDS); Home Health & Hospice (HHH); and Medical Solutions (MS).
For the fiscal 2024 third quarter that ended September 28, 2024, AVAH’s revenue increased 6.5% year-over-year to $509.02 million. Its operating income came in at $34.02 million, compared to an operating loss of $76.35 million in the previous year’s quarter.
Moreover, the company’s adjusted net income and adjusted net income per share amounted to $4.58 million and $0.02, compared to a net loss and loss per share of $4.74 million and $0.03 in the previous year’s quarter, respectively.
The company has announced its revised outlook for the full fiscal year 2024. AVAH expects revenue of approximately $2.0 billion, updated from prior guidance of revenue of $1.99 billion. It also expects an adjusted EBITDA of greater than $168 million, up from prior guidance of greater than $158 million.
Street expects AVAH’s revenue for the fiscal 2024 fourth quarter, which ended in December 2024, to increase 4.3% year-over-year to $499.61 million. Additionally, the company has surpassed the consensus revenue and EPS estimates in all four trailing quarters, which is impressive.
Its revenue for the fiscal 2025 first quarter (ending in March) is expected to increase 5.2% year-over-year to $516.17 million.
AVAH’s stock has surged 10.2% over the past month and 93.4% over the past nine months, ending the last trading session at $4.97.
AVAH’s strong fundamentals are mirrored in its POWR Ratings. The stock has an overall rating of A, translating to a Strong Buy in our proprietary rating system.
AVAH has an A grade for Growth and a B for Value, Sentiment, and Stability. AVAH is ranked #4 out of 63 stocks within the Medical - Services industry.
To access AVAH’s Momentum and Quality ratings, click here.
Stock #1: National HealthCare Corporation (NHC)
NHC provides services to skilled nursing facilities, assisted and independent living facilities, homecare and hospice agencies, and health hospitals. The company’s service offerings include licensed therapy services, nutrition services, social services, activities, and housekeeping and laundry services.
On August 1, 2024, NHC acquired White Oak Manor. Coming with 21 healthcare operations, including 15 skilled nursing facilities, two assisted living facilities, and four independent living facilities, the acquisition expands the company’s portfolio.
For the fiscal 2024 third quarter that ended on September 30, 2024, NHC’s net operating revenues and grant income increased 17.9% year-over-year to $340.20 million. Its income from operations rose 61.6% from the year-ago value to $21.05 million.
Additionally, the company’s non-GAAP net income and non-GAAP EPS grew 50.3% and 47.7% from the prior year’s quarter to $19.91 million and $1.27, respectively.
NHC’s stock has surged 4.4% over the past month and 11.2% over the past year to close the last trading session at $102.
NHC’s POWR Ratings reflect its sound fundamentals. The stock has an overall rating of B, translating to a Buy in our proprietary rating system.
NHC has an A grade for Growth and Quality and a B for Stability. Within the Medical - Services industry, it is ranked #3 out of 63 stocks.
In addition to the POWR Rating highlighted above, you can check NHC’s ratings for Sentiment, Value, and Momentum here.
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AMED shares were unchanged in premarket trading Wednesday. Year-to-date, AMED has gained 1.94%, versus a 4.34% rise in the benchmark S&P 500 index during the same period.
About the Author: Aritra_Gangopadhyay
Aritra is a financial journalist dedicated to breaking down complex financial topics into simple, actionable insights. Holding a Master’s degree in Economics, he uses his analytical expertise to help investors uncover unique opportunities for long-term success.
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