Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. NEW YORK ( TheStreet) -- AMN Healthcare Services (NYSE: AHS) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.
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- AMN HEALTHCARE SERVICES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, AMN HEALTHCARE SERVICES INC increased its bottom line by earning $0.34 versus $0.11 in the prior year. This year, the market expects an improvement in earnings ($0.57 versus $0.34).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 76.9% when compared to the same quarter one year prior, rising from $4.28 million to $7.56 million.
- AHS's debt-to-equity ratio of 0.83 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that AHS's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.56 is high and demonstrates strong liquidity.
- The gross profit margin for AMN HEALTHCARE SERVICES INC is currently lower than what is desirable, coming in at 29.00%. Regardless of AHS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, AHS's net profit margin of 2.99% compares favorably to the industry average.
- Net operating cash flow has significantly decreased to -$2.70 million or 128.25% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
-- Written by a member of TheStreet Ratings Staff