Healthcare staffing company AMN Healthcare Services (NYSE: AMN) reported Q1 CY2025 results topping the market’s revenue expectations, but sales fell by 16% year on year to $689.5 million. The company expects next quarter’s revenue to be around $652.5 million, close to analysts’ estimates. Its non-GAAP profit of $0.45 per share was significantly above analysts’ consensus estimates.

Is now the time to buy AMN Healthcare Services? Find out by accessing our full research report, it’s free.

“Our financial results for the first three months of 2025 yielded positive upside in revenue and operating leverage. We are benefiting from growth in our clients' patient volumes, continued normalization in our industry, and market adoption of our tech-enabled talent solutions,” said Cary Grace, President and Chief Executive Officer of AMN Healthcare.

Company Overview

With a network of thousands of healthcare professionals ranging from nurses to physicians to executives, AMN Healthcare (NYSE: AMN) provides healthcare workforce solutions including temporary staffing, permanent placement, and technology platforms for hospitals and healthcare facilities across the United States.

Sales Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, AMN Healthcare Services grew its sales at a mediocre 4.5% compounded annual growth rate. This was below our standard for the healthcare sector and is a tough starting point for our analysis.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. AMN Healthcare Services’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 23% annually.

AMN Healthcare Services also reports its number of travelers on assignment, which reached 8,981 in the latest quarter. Over the last two years, AMN Healthcare Services’s travelers on assignment averaged 21.7% year-on-year declines. Because this number is in line with its revenue growth, we can see the company kept its prices fairly consistent.

This quarter, AMN Healthcare Services’s revenue fell by 16% year on year to $689.5 million but beat Wall Street’s estimates by 2.9%. Company management is currently guiding for a 11.9% year-on-year decline in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to decline by 7.6% over the next 12 months. Although this projection is better than its two-year trend, it's tough to feel optimistic about a company facing demand difficulties.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.

Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

AMN Healthcare Services was profitable over the last five years but held back by its large cost base. Its average operating margin of 8% was weak for a healthcare business.

Looking at the trend in its profitability, AMN Healthcare Services’s operating margin decreased by 12.7 percentage points over the last five years. This performance was caused by more recent speed bumps as the company’s margin fell by 16.3 percentage points on a two-year basis. We’re disappointed in these results because it shows its expenses were rising and it couldn’t pass those costs onto its customers.

This quarter, AMN Healthcare Services generated an operating profit margin of 1.8%, down 3.1 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for AMN Healthcare Services, its EPS declined by 2.8% annually over the last five years while its revenue grew by 4.5%. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

Diving into the nuances of AMN Healthcare Services’s earnings can give us a better understanding of its performance. As we mentioned earlier, AMN Healthcare Services’s operating margin declined by 12.7 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; taxes and interest expenses can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q1, AMN Healthcare Services reported EPS at $0.45, down from $0.97 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects AMN Healthcare Services’s full-year EPS of $2.79 to shrink by 56.4%.

Key Takeaways from AMN Healthcare Services’s Q1 Results

We were impressed by how significantly AMN Healthcare Services blew past analysts’ revenue, EPS, and EBITDA expectations this quarter. Zooming out, we think this quarter featured some important positives. The stock traded up 12.3% to $22.80 immediately after reporting.

AMN Healthcare Services may have had a good quarter, but does that mean you should invest right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.