Kyle Mowery of GrizzlyRock Capital presented his in-depth investment thesis on AMN Healthcare Services (US: AMN) at Best Ideas 2026.
Thesis summary:
AMN is the largest diversified healthcare staffing provider in the U.S., offering a comprehensive suite of workforce solutions that includes nurse and allied staffing, physician placement, and technology-driven workforce management. The company operates in a cyclical industry that is currently emerging from a post-COVID trough, a period characterized by compressed bill-pay spreads as healthcare systems shifted toward permanent labor to rationalize costs. Recent data indicates an inflection point; demand for travel nurses has rebounded approximately 50% from mid-2025 lows, and bill rates have stabilized with early signs of improvement. AMN’s scale, combined with its integrated technology platform, positions it advantageously against smaller competitors and “tech-native” entrants that have struggled with profitability and fulfillment during the downturn.
Long-term demand is supported by robust secular tailwinds, specifically an aging demographic driving higher healthcare utilization against a backdrop of persistent shortages in clinical labor. AMN has strategically diversified its revenue mix, reducing reliance on traditional staffing by expanding into high-margin technology and workforce solutions which enhance client retention. While the upcoming renewal of the Kaiser contract—historically representing a notable portion of revenue—creates a perceived overhang, the depth of the relationship suggests a high probability of renewal. Furthermore, a growing pipeline of vendor management system (VMS) and managed service provider (MSP) opportunities in late 2026 offers additional avenues for margin expansion and revenue growth largely ignored by current street estimates.
Financially, AMN remains highly cash-generative throughout the cycle, averaging robust FCF even prior to its recent expansion into higher-margin segments. Although headline leverage appeared elevated at 3.9x LTM in late 2025 due to cyclically depressed earnings, the company has successfully termed out debt at attractive fixed rates. Management expects leverage to naturally deleverage to below 3.0x over the next four to six quarters as EBITDA recovers. This strong cash conversion profile provides flexibility for capital allocation, including potential share repurchases or accretive M&A in a fragmented market where private valuations are resetting.
Shares recently traded at approximately $16, implying a valuation of roughly 6.9x estimated 2026 EBITDA and a normalized FCF yield to equity approaching 25%. This valuation reflects a market consensus that likely underestimates the pace of the recovery in bill-pay spreads and volume demand. As the cycle turns and margins normalize toward historical averages, the disconnect between the current share price and the company’s intrinsic earnings power presents a compelling asymmetry, with potential for material upside as operating leverage takes hold and sentiment realigns with business fundamentals.
Disclaimer
Best Ideas 2026 was held from January 6-23, 2026. The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.
Slides
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