NYSE:AMN, an undervalued stock with good fundamentals.

AMN HEALTHCARE SERVICES INC (NYSE:AMN) was identified as a decent value stock by our stock screener. NYSE:AMN scores well on profitability, solvency and liquidity. At the same time it seems to be priced very reasonably. We'll explore this a bit deeper below.

Understanding NYSE:AMN's Valuation

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NYSE:AMN was assigned a score of 8 for valuation:

• A Price/Earnings ratio of 6.23 indicates a rather cheap valuation of AMN.
• Based on the Price/Earnings ratio, AMN is valued cheaply inside the industry as 96.46% of the companies are valued more expensively.
• AMN is valuated cheaply when we compare the Price/Earnings ratio to 26.00, which is the current average of the S&P500 Index.
• Based on the Price/Forward Earnings ratio of 11.76, the valuation of AMN can be described as reasonable.
• AMN's Price/Forward Earnings ratio is rather cheap when compared to the industry. AMN is cheaper than 90.27% of the companies in the same industry.
• The average S&P500 Price/Forward Earnings ratio is at 21.37. AMN is valued slightly cheaper when compared to this.
• AMN's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. AMN is cheaper than 95.58% of the companies in the same industry.
• Based on the Price/Free Cash Flow ratio, AMN is valued cheaper than 95.58% of the companies in the same industry.
• AMN has an outstanding profitability rating, which may justify a higher PE ratio.

Profitability Assessment of NYSE:AMN

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:AMN, the assigned 8 is a significant indicator of profitability:

• The Return On Assets of AMN (10.55%) is better than 91.15% of its industry peers.
• AMN has a better Return On Equity (34.26%) than 91.15% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 16.02%, AMN belongs to the top of the industry, outperforming 92.92% of the companies in the same industry.
• AMN had an Average Return On Invested Capital over the past 3 years of 17.26%. This is significantly above the industry average of 8.74%.
• AMN has a better Profit Margin (6.84%) than 88.50% of its industry peers.
• The Operating Margin of AMN (10.34%) is better than 86.73% of its industry peers.
• AMN has a Gross Margin of 33.29%. This is in the better half of the industry: AMN outperforms 60.18% of its industry peers.

Understanding NYSE:AMN's Health

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:AMN has earned a 7 out of 10:

• AMN has an Altman-Z score of 3.60. This indicates that AMN is financially healthy and has little risk of bankruptcy at the moment.
• AMN's Altman-Z score of 3.60 is fine compared to the rest of the industry. AMN outperforms 77.88% of its industry peers.
• AMN has a debt to FCF ratio of 2.18. This is a good value and a sign of high solvency as AMN would need 2.18 years to pay back of all of its debts.
• With an excellent Debt to FCF ratio value of 2.18, AMN belongs to the best of the industry, outperforming 83.19% of the companies in the same industry.
• Even though the debt/equity ratio score it not favorable for AMN, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
• AMN does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

How do we evaluate the Growth for NYSE:AMN?

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:AMN, the assigned 4 reflects its growth potential:

• AMN shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 19.92% yearly.
• The Revenue has been growing by 12.15% on average over the past years. This is quite good.
• The Earnings Per Share is expected to grow by 8.16% on average over the next years. This is quite good.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

Check the latest full fundamental report of AMN for a complete fundamental analysis.

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.