AMN Healthcare Earnings: Margin Under Substantial Pressure as Clients Reflect on Workforce Demands

Narrow-moat AMN Healthcare's fourth-quarter results came in line with our expectations. However, we are lowering our fair value estimate to $95 per share from $115 mainly due to the firm's lower margin outlook. We think AMN's performance is under substantial pressure as healthcare organizations make efforts to reduce contract labor costs and cater to normalized medical utilization trends with permanent hires. However, AMN still benefits from its network effect with the company continuing to enhance its locum tenens and technology offerings.