Amedisys’ AMED continuously improving clinical quality for patients, demonstrated through high Quality of Patient Care and Patient Satisfaction star ratings, is poised to drive growth in the upcoming quarters. The company’s valuable partnership and acquisition are expected to generate significant synergies. However, a dull macroeconomic scenario and fierce competitive pressure may restrict Amedisys’ growth potential.

In the past year, this Zacks Rank #3 (Hold) company’s shares have risen 0.4% compared with the industry and the S&P 500 composite’s growth of 5.1% and 7.9%, respectively.

The leading home health and hospice services provider has a market capitalization of $3.03 billion. Amedisys has an earnings yield of 5.2%, higher than the industry’s 4.4%. 

Tailwinds for AMED Stock

Efforts to Improve Clinical Quality: Amedisys focuses on clinical distinction, which is demonstrated through its Quality of Patient Care and Patient Satisfaction star ratings. In the Centers for Medicare and Medicaid Services (“CMS”) January 2025 Final release, Amedisys successfully maintained this goal, achieving an average Quality of Patient Care star rating of 4.18 across all providers. 88% of its care centers received a rating of 4 stars or higher, with 11 centers earning a perfect 5-star rating. Additionally, Amedisys' Patient Satisfaction star average was 4.02, surpassing the industry average.

Strategic Partnerships and Dispositions to Add Values: Amedisys is developing and acquiring new business lines to complement its existing home care and hospice business. In 2024, Contessa Health, a subsidiary of Amedisys, was selected by the CMS to participate in a new Medicare alternative payment model, designed to support people living with dementia and their caregivers. 

Under CMS’ guidance of an improved dementia experience model, Contessa will be one of the almost 400 participants building dementia care programs across the country, working to increase care coordination. Earlier in 2024, the company introduced advanced molecular testing to its nationwide care centers in collaboration with Patient Choice Laboratories. 

Headwinds for AMED Stock

Macroeconomic Pressures on Business Operations: Escalating conflicts in the Middle East, Ukraine and other geopolitical tensions have been creating volatility in the global financial markets which are likely to cause severe disruptions in the global supply chain and energy markets. Furthermore, inflation has been steadily increasing throughout the U.S. economy. 

Amedisys anticipates these pressures to persist in the coming quarters. In line with this, the company reported a 7.2% increase in the cost of services, which in turn resulted in a gross margin contraction of 131 basis points in the fourth quarter of 2024. 

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Competitive Landscape: The market for home health and hospice is fragmented with several small local providers. With few barriers to entry in this market, Amedisys primarily faces tough competition from local privately and publicly-owned, and hospital-owned healthcare providers. In addition, it competes with some non-profit organizations that finance acquisitions and capital expenditures on a tax-exempt basis or receive charitable contributions that are unavailable to the company.

Amedisys’ Estimates Trend

The Zacks Consensus Estimate for 2025 earnings per share has remained unchanged at $4.45 in the past 30 days.

The Zacks Consensus Estimate for 2025 revenues is pegged at $2.46 billion, indicating a 5% rise from the year-ago reported number.

Key Picks

Some better-ranked stocks in the broader medical space are Phibro Animal Health PAHC, Boston Scientific BSX and Cardinal Health CAH.

Phibro Animal Health has an estimated fiscal 2025 earnings growth rate of 62.2% compared with the industry’s 17.2%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 27.06%. The company’s shares have surged 73.5% compared with the industry’s 9.5% growth in the past year.

PAHC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Boston Scientific, carrying a Zacks Rank #2 (Buy) at present, has an earnings yield of 2.7% compared with the industry’s 1.5%. Shares of the company have rallied 47.1% compared with the industry’s 9.5% growth. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.25%.

Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term earnings growth rate of 10.7% compared with the industry’s 9.5%. Shares of the company have rallied 17.5% against the industry’s 3.2% decline. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.64%.

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