AMN Healthcare Services (AMN), a "Best Idea" short for Hedgeye's Healthcare team, plummeted 18% today after a weak earnings report. The stock price is now down 34% year-over-year.

“This is not an extraordinarily great business with huge opportunity, this is one of the more cyclical things I follow,” Healthcare analyst Tom Tobin said this morning on The Call @ Hedgeye. “They are the marginal supplier of marginal demand, and marginal demand is receding.”

The healthcare staffing and recruiting agency forecasts yet another down quarter for 1Q24 due to substantial pressure on its margins. 

“People keep trying to find the bottom and this thing keeps declining. It’s not over,” Tobin adds.

AMN is among the top 20 of Hedgeye CEO Keith McCullough’s top Signal Strength Shorts.

Tobin warned investors of the downside concerns Wednesday ahead of AMN's earnings call.

"The price component really looks like it’s given up a lot of the COVID-related premium," Tobin said on The Call. "We'll be watching for how they handle their own recruiter costs; we would be shorting the name into the print."

As competition, margin pressure and other industry headwinds increase, we believe there is still room to the downside for AMN.

Subscribe to Heatlhcare Pro for more of Tobin's insights on the sector.