If you can't beat 'em, give up. After several quarters where Amedisys (AMED)
has missed analyst expectations, interim management has chosen to stop
providing guidance for the timing being. Seeing as how the company needs
to hire a new CEO (who likely will come in with a set of ideas about
how to run/change the business) and is still in the midst of efforts to
reduce costs and respond to reimbursement cuts, that's a reasonable
move. Still, in the absence of information investors may choose to
assume the worst.
It is difficult to feel all that cheerful or
optimistic about this business. Costs per visit have been rising
steadily, while revenue is pressured by reimbursement cuts and sluggish
admissions. Amedisys is one of the largest operators in a fragmented
industry likely to consolidate in response to ongoing reimbursement
pressures, but a settlement with the government will stress the balance
sheet and margins are very weak at present. The stock has been
surprisingly strong for all of the company's travails, but I'd be
hesitant to pay almost double the valuation (on a forward EV/EBITDA
basis) for Amedisys over its peers even if this is a low period for the
industry.
Read more here:
Weak Performance Continues To Plague Amedisys
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