AMN Healthcare Passes Inflection Point: Staffing Demand to Settle Above Prepandemic Levels

AMN Healthcare Services posted solid second-quarter results driven by the deepening shortage of healthcare workers and offset by employer budget limitations. Though revenue rose by 66% year over year, we’re more focused on the sequential 8% decline as staffing revenue begins to descend from its peak in the first quarter. Over the second half of this year, we expect that staffing demand will fall sharply, then decelerate over 2023 toward a new baseline. Despite the significant downturn ahead, we are maintaining our fair value estimate of $85 per share as the firm is tracking along with our full-year projections. Due to the widening nurse shortage and national bottlenecks in nurse training capacity, we expect AMN’s new baseline staffing demand should persist above its prepandemic level well into the decade.