Breaking Down Amedisys, Inc. (AMED) Financial Health: Key Insights for Investors

You might think Amedisys, Inc. is a closed chapter since UnitedHealth Group's Optum subsidiary finalized the $3.3 billion all-cash acquisition in August 2025, but the real financial story is in what they bought, and what that means for the home health sector's future. The company's financial health just before the merger was defintely strong, with Q2 2025 net service revenue hitting $621.9 million, a solid 5% increase year-over-year, showing that the home health and hospice segments were operating efficiently right up to the finish line. Adjusted EBITDA for the first half of 2025 reached $149.6 million, proving the underlying business model-driven by a 6% jump in same-store Home Health admissions-was robust, even while navigating the cost of a long regulatory battle with the Department of Justice. We need to look past the final share price and focus on the integration risk now; that is the new investment thesis.

Revenue Analysis

You need a clear picture of where Amedisys, Inc. (AMED)'s money is actually coming from, especially with the UnitedHealth Group (UHG) acquisition looming. The direct takeaway is that Amedisys, Inc. continues to see solid, single-digit growth, driven overwhelmingly by its core Home Health segment, which remains deeply reliant on Medicare payments.

For the trailing twelve months (TTM) leading up to November 2025, Amedisys, Inc. generated approximately $2.40 Billion in net service revenue, marking a year-over-year growth rate of around 4.92%. This is a steady, predictable growth profile, but it also highlights the company's concentration risk in government-funded programs, which is a key factor to watch.

Segment Contribution and Growth Drivers

Amedisys, Inc. operates across three primary segments: Home Health, Hospice, and the emerging High Acuity Care. Looking at the second quarter of 2025 (Q2 2025), the company reported total net service revenue of $621.9 million, an increase of 5.2% from the same period in 2024. This growth is defintely a testament to the demographic tailwinds favoring in-home care services, but the mix is what matters most for investors.

The Home Health segment is the undisputed revenue engine. It contributed $396.2 million to Q2 2025 revenue, representing roughly 63.7% of the consolidated total. This segment saw a strong increase over the $377.4 million reported in Q2 2024. The Hospice segment, the second largest, generated $215.0 million, or about 34.6% of total revenue. The High Acuity Care segment, which provides hospital-level care at home, is still small but growing fast, reporting $10.7 million in Q2 2025. It's a small number, but the growth rate is significant.

Payer Mix and Near-Term Risks

Here's the quick math on risk: Amedisys, Inc.'s revenue is heavily tied to government payers, specifically Medicare. For the Home Health segment, 54.3% of revenue comes from Medicare fee-for-service programs, and for Hospice, that reliance jumps to an enormous 95.4%. This means any regulatory change from the Centers for Medicare & Medicaid Services (CMS), like the proposed 6.4% aggregate payment cut for home health in 2026, hits the top line hard. That's a clear, material risk.

Also, the pending $3.3 billion merger with UnitedHealth Group's Optum is still the elephant in the room. The U.S. Department of Justice (DOJ) lawsuit and the required divestiture of 164 locations to settle antitrust concerns will impact future revenue streams and operational structure, regardless of the deal's final outcome. You should be tracking the details of this deal closely, as it changes the fundamental investment thesis. For a deeper dive on who is buying and why, check out Exploring Amedisys, Inc. (AMED) Investor Profile: Who's Buying and Why?

• Home Health volume is up, driving core growth.
• Medicare exposure is extremely high, creating regulatory risk.
• Merger-related divestitures will reshape the revenue footprint.

Profitability Metrics

You want to know if Amedisys, Inc. (AMED) is truly making money, or if the revenue growth is just a vanity metric. The quick takeaway is that while the company maintains a strong gross profit, their net profit margin trails the industry average, largely due to significant operational and merger-related costs.

Looking at the trailing twelve months (TTM) data as of mid-2025, Amedisys, Inc. (AMED) shows a solid gross margin but a thin bottom line. Their TTM Gross Margin stands at a healthy 43.19%, which is the first sign of efficient service delivery before overhead. This means for every dollar of service revenue, they keep about 43 cents after paying for direct care costs like nurse salaries and supplies.

However, the margins narrow quickly as you move down the income statement. The TTM Operating Margin is 9.41%, and the TTM Net Profit Margin is just 3.56%. This tells you that the company's selling, general, and administrative expenses (SG&A) and other non-care costs are eating up a significant portion of the profit. Honestly, a 3.56% net margin is tight.

Here is a snapshot of the TTM profitability ratios:

Here's the quick math: Amedisys, Inc.'s TTM revenue was approximately $2.40 billion, yielding a net profit of about $85.63 million. This is a low-margin business, and you defintely need to watch for cost creep.

Profitability Trends and Industry Comparison

The trend analysis reveals a mixed bag across Amedisys, Inc.'s segments. In Q2 2025, the Home Health segment's gross margin contracted slightly to 41.9% from 43.1% in Q2 2024, likely due to rising labor costs and reimbursement pressures. But, the Hospice segment is a bright spot, with its gross margin expanding to 49.6% from 49.0% over the same period. The overall net income has seen some volatility, like the Q1 2025 net income of $61.0 million, which was significantly bolstered by a one-time $48.1 million gain on an equity method investment. That's a good example of why you must look past the headline numbers.

When you compare Amedisys, Inc.'s profitability to the broader industry, their TTM Net Profit Margin of 3.56% is below the general Home Health and Hospice industry's net margins, which are typically around 5% for Home Health and 6% for Hospice. This gap suggests that while Amedisys, Inc. is a market leader, they may not be the most profitable operator on a net basis, which is often a trade-off for scale and diversification.

• Home Health Gross Margin: 41.9% (Q2 2025).
• Hospice Gross Margin: 49.6% (Q2 2025).
• Industry Net Margin: 5-6% (General Home Health/Hospice).

Operational Efficiency and Cost Management

Amedisys, Inc. is taking clear steps to manage costs and improve operational efficiency. The increase in Q1 2025 operating income to $43.4 million, up from $31.6 million year-over-year, indicates effective cost management strategies and strategic execution, even with merger-related expenses. They are focusing on what they can control.

Specifically, management has demonstrated cost discipline, with General and Administrative (G&A) expenses as a percentage of revenue decreasing by 150 basis points year-over-year as of Q2 2025. This reduction in overhead is crucial for a low-margin business and shows they are pushing for efficiencies in their back office. Their dedication to quality, as detailed in the Mission Statement, Vision, & Core Values of Amedisys, Inc. (AMED), also supports long-term operational health, as high-quality scores lead to better patient referrals and reimbursement. The focus now is on translating those operational wins into a higher net margin that closes the gap with the industry average.

Debt vs. Equity Structure

You're looking at Amedisys, Inc. (AMED) and wondering how they fund their operations-is it mostly debt or shareholder money? The short answer is they rely heavily on equity, maintaining a very conservative balance sheet, which is a significant strength as of mid-2025.

This low-leverage strategy is a clear signal of financial discipline, especially in a capital-intensive healthcare sector facing reimbursement pressures. For an investor, a low debt-to-equity profile reduces risk, but it also means the company hasn't maximized the use of financial leverage (borrowing money to boost returns on equity).

Here's the quick math on their financing mix, based on the most recent filings:

• Debt-to-Equity (D/E) Ratio: The ratio stands at a low 0.35. This means for every dollar of shareholder equity (the book value of the company), Amedisys, Inc. uses only 35 cents of debt. This is defintely a conservative position, especially compared to many healthcare peers who often operate with a D/E ratio closer to 1.0 or higher.
• Total Debt Exposure: As of June 30, 2025, the total amount of outstanding debt subject to interest rate fluctuations was approximately $338.1 million. This is a manageable figure, particularly when you look at their overall liquidity.

The company's minimal net leverage ratio of just 0.1x as of the second quarter of 2025 reinforces this point. This low figure means their total debt is almost entirely offset by their cash and cash equivalents, giving them a huge cushion against market volatility or operational setbacks.

Amedisys, Inc. has focused its capital strategy on maintaining substantial liquidity. They reported total liquidity of $845.3 million as of Q2 2025, with $508.0 million still available on their revolving credit facility. This war chest is a strategic asset, providing flexibility for growth initiatives or, more recently, navigating the complexities of their pending acquisition. The amortization of deferred debt issuance costs suggests they have existing long-term debt, but no major new debt issuances or refinancing activities have been a primary focus in 2025, largely overshadowed by the merger process.

The balance is clear: Amedisys, Inc. prioritizes a strong, equity-backed foundation over aggressive debt financing. This approach is a key factor in their resilience and ability to execute on their Mission Statement, Vision, & Core Values of Amedisys, Inc. (AMED).

Next step: Review the implications of this low-leverage structure on their post-acquisition capital allocation strategy.

Liquidity and Solvency

You're looking at Amedisys, Inc. (AMED) and wondering about its ability to cover near-term obligations-its liquidity. This is defintely the right place to start, especially with the pending merger with UnitedHealth Group. The good news is Amedisys, Inc. maintains a strong, healthy liquidity profile based on its most recent trailing twelve months (TTM) data, showing a robust capacity to meet its short-term debts.

The company's liquid assets are comfortably greater than its current liabilities (debts due within one year). This is a solid position. Here's the quick math on the key liquidity ratios for the TTM period ending in mid-2025:

• Current Ratio: 1.36
• Quick Ratio (Acid-Test): 1.30

A Current Ratio of 1.36 means Amedisys, Inc. has $1.36 in current assets for every dollar of current liabilities. Even better, the Quick Ratio, which strips out less-liquid inventory, is nearly as high at 1.30. This signals that even without selling any medical supplies or equipment inventory, the company has ample cash and receivables to pay its immediate bills.

Working Capital and Near-Term Strength

The trend in working capital (current assets minus current liabilities) is also a strong indicator of operational efficiency. For the TTM period, Amedisys, Inc.'s working capital stood at $173.84 million. This substantial buffer is a direct result of effective accounts receivable management, which is crucial in the healthcare sector where payment cycles can be long. They are collecting their money quickly, which translates directly to financial flexibility.

What this estimate hides is the company's total liquidity, which is even stronger. As of the second quarter of 2025, Amedisys, Inc. reported total liquidity of $845.3 million, which includes $337.30 million in cash and cash equivalents and $508.0 million available on its revolving credit facility. That's a huge safety net for any unexpected operating costs or merger-related expenses.

Decoding the Cash Flow Statement

To truly understand liquidity, you have to look at how cash is moving through the business-the cash flow statement. The six-month period ended June 30, 2025, shows a clear picture of cash generation and deployment, which is critical for a service-based business like Amedisys, Inc. The company's core operations are a powerful cash engine.

Cash Flow from Operations (CFO) is where the magic happens. The TTM CFO of $239.43 million is a clear sign that the business model is highly cash-generative. They are making money providing home health and hospice care, and that cash is flowing back into the company. The Cash Flow from Investing Activities (CFI) shows a net use of $2.295 million for the first half of 2025, which is low, suggesting the company is not currently making large capital investments, likely due to the pending merger.

Cash Flow from Financing Activities (CFF) shows a net use of $27.167 million over the same six-month period. This net outflow is healthy, as it's largely driven by paying down debt principal, which reduces long-term risk. The company's total debt is manageable at $450.51 million. This disciplined approach to debt repayment, combined with strong cash generation, means there are no immediate liquidity concerns. This financial stability is one of the pillars supporting the proposed acquisition. For a deeper dive into who is betting on this stability, you might want to read Exploring Amedisys, Inc. (AMED) Investor Profile: Who's Buying and Why?

Valuation Analysis

You're looking at Amedisys, Inc. (AMED) to understand its valuation, but the most important context is this: the company was delisted on August 14, 2025, following its acquisition by UnitedHealth Group (UNH). So, our valuation analysis is really a retrospective look at its final public trading metrics and whether the acquisition price validated the market's view.

The core question of overvalued or undervalued was settled by the acquisition, but the pre-deal ratios tell a story of a growth stock in a high-demand sector-home health and hospice. Honesty, the multiples were rich.

Here's the quick math on the key trailing-twelve-month (TTM) valuation multiples leading up to the delisting in 2025:

• Price-to-Earnings (P/E): 39.30
• Price-to-Book (P/B): 2.61

A P/E of 39.30 was defintely trading at a premium, sitting slightly above the market average of 38.45 and the Medical sector average of 36.49. This suggests investors were pricing in significant future earnings growth, which is common in a sector with favorable demographic tailwinds, as detailed in the Mission Statement, Vision, & Core Values of Amedisys, Inc. (AMED).

Stock Price Trend and Final Value

The stock's performance in the 12 months leading up to the acquisition was relatively stable, with an increase of about +2.99% over the last 52 weeks. This steady climb was largely driven by the ongoing merger speculation and eventual deal finalization.

The stock traded at $100.99 on its last day of trading, August 14, 2025. For context, the price was around $92.63 in March 2025, which shows a modest but consistent appreciation as the deal progressed. The company does not pay a dividend, so the dividend yield and payout ratios are 0.00% and N/A, respectively.

To be fair, the Enterprise Value-to-EBITDA (EV/EBITDA) is less relevant now, but for a sense of scale, the company reported Adjusted EBITDA of $80.8 million for the second quarter of 2025 alone. This shows a healthy operational cash flow before the final transaction.

Analyst Consensus: The Hold Signal

Before the acquisition closed, the analyst community had a clear, conservative stance. The average analyst rating from the 3 firms covering the stock was a 'Hold.' Their average 12-month price target was $100.67, with a high estimate of $101 and a low of $100.

What this estimate hides is the acquisition floor. The final price of $100.99 was almost perfectly aligned with the consensus target of $100.67, suggesting the market had accurately priced the deal risk and value. This alignment is a strong indicator that the stock was trading at its fair value-neither overvalued nor undervalued-right before it was taken private.

Risk Factors

The biggest near-term risk for Amedisys, Inc. (AMED) isn't operational performance-it's the massive regulatory overhang from the proposed merger with UnitedHealth Group (UHG). That single strategic uncertainty is driving significant financial and managerial costs, but it's not the only headwind you need to watch.

The Merger Uncertainty: A $3.3 Billion Question Mark

The proposed acquisition of Amedisys, Inc. by UnitedHealth Group for $3.3 billion is the primary strategic risk. The U.S. Department of Justice (DOJ) filed a lawsuit in November 2024 to block the deal, citing antitrust concerns that the combined entity could control over 30% of home health and hospice services in eight states. This legal battle introduces a huge amount of uncertainty, and the deadline for the merger was extended to December 31, 2025, or ten days after a final court decision, whichever is earlier. That's a long time to wait for clarity.

The financial cost of this uncertainty is already clear in the 2025 reports. In the first quarter of 2025, Amedisys incurred $16.8 million in merger-related expenses, and that figure jumped to $26.3 million in the second quarter of 2025. That's a direct drag on profitability, but the company is still performing well operationally. For instance, in Q2 2025, Amedisys reported net service revenue of $621.9 million, up from $591.2 million in Q2 2024, showing the core business is strong. Still, the merger risk is defintely the elephant in the room. Exploring Amedisys, Inc. (AMED) Investor Profile: Who's Buying and Why?

Here's the quick math on the merger's financial downside, just in case the deal collapses:

• Merger-related expenses in H1 2025: $43.1 million ($16.8M + $26.3M).
• Regulatory Break Fee: $275 million (payable by UHG if the deal fails due to regulatory issues, potentially rising to $325 million).

External and Operational Headwinds

Beyond the merger, Amedisys, Inc. faces two persistent external risks common to the home healthcare sector: regulatory changes and labor shortages. The company is heavily reliant on Medicare, which has historically accounted for 70% to 74% of its revenue. This reliance makes it highly vulnerable to policy shifts from the Centers for Medicare & Medicaid Services (CMS).

The most recent threat is the proposed 2026 home health payment rule, which includes a projected 6.4% aggregate cut to home health payments. Amedisys, Inc. has stated that its expected impact is in line with this decrease. They are actively engaging with industry advocates and lobbying firms to mitigate this proposed cut, which is a standard, but necessary, defense strategy in this sector.

The operational risk is a perennial one: finding and keeping qualified clinical staff. The labor situation is the industry's biggest headwind. Here's how Amedisys, Inc. is working to mitigate the clinician shortage:

• Workforce Optimization: A key strategic focus to maximize the productivity of existing staff.
• Predictive Analytics: Using technology that predicts with 85% accuracy the likelihood of a clinician leaving within eight weeks.
• Incentive Alignment: Building clinician turnover metrics into incentive plans for local clinical leadership, all the way up to the C-Suite.

Also, like any large healthcare provider, Amedisys, Inc. faces constant cybersecurity risks. A data breach could lead to significant legal liabilities and reputational damage, another persistent operational risk you must factor in.

The next step is simple: watch the DOJ's movements closely. The outcome of that lawsuit will dictate the near-term stock price more than any Q3 earnings beat.

Growth Opportunities

You're looking for clear signals on Amedisys, Inc. (AMED)'s future, and the data from the first half of 2025 points to a continued, structural tailwind in home-based care. The company is capitalizing on a massive demographic shift, which is translating into solid revenue and earnings growth despite merger-related headwinds.

The core takeaway is that the aging U.S. population and the industry's shift toward value-based care are the primary, defintely non-cyclical, drivers here. Amedisys is well-positioned to ride this wave with its diversified service portfolio.

Key Growth Drivers: Demographics and High-Acuity Care

The most powerful growth driver for Amedisys, Inc. is the simple fact that the U.S. population aged 75 and older is growing significantly, and most people prefer to receive care at home. This is the macro-level trend that underpins their entire business model. The company's expansion into higher-margin, specialized services is what converts that trend into tangible financial results.

The High Acuity Care segment, which delivers inpatient hospital care in patients' homes, is a prime example of this innovation. This segment saw admissions surge by an impressive 29% in the second quarter of 2025 alone, with net service revenues hitting $7.7 million in Q1 2025, up from $4.4 million in the prior year's first quarter. Furthermore, the Home Health segment, which makes up about 63.7% of consolidated revenue, delivered 6% growth in same-store admissions in Q2 2025. This shows the core business is still very healthy.

• Capitalize on aging population demand.
• Scale the High Acuity Care segment.
• Boost Non-Medicare revenue, which grew nearly 20% in Q1 2025.
• Use predictive analytics to optimize care delivery.

Strategic Roadmap and Earnings Outlook

Near-term growth is heavily influenced by the proposed strategic merger with UnitedHealth Group (UHG), a $3.3 billion deal that is expected to significantly enhance Amedisys, Inc.'s market reach and service capabilities by integrating it with UHG's Optum subsidiary. While this partnership is a major strategic pillar, it's crucial to acknowledge the ongoing antitrust investigation by the U.S. Department of Justice (DOJ), which is a near-term risk to the transaction's completion. The merger is currently in mediation.

Looking at the financials, the company continues to demonstrate strong operational efficiency, even with merger-related expenses. The trailing twelve months (TTM) revenue is approximately $2.40 billion, showing a solid run-rate for the business. Analysts project the company's earnings per share (EPS) to grow from $4.40 per share to $4.84 per share in the following year, which is a 10.00% increase. Here's the quick math on the first half of 2025 performance:

Competitive Moat and Financial Strength

Amedisys, Inc.'s competitive advantage (or 'moat') is built on clinical excellence and financial discipline. They operate one of the largest home health and hospice care networks in the U.S. Their quality scores are industry-leading; the Centers for Medicare & Medicaid Services (CMS) reports a Quality of Patient Care star average of 4.18 and a Patient Satisfaction star average of 4.02. These high scores are essential for securing referrals and maintaining market share in a competitive landscape.

The balance sheet also provides a strong foundation for future growth and potential acquisitions. As of Q2 2025, the company reported a total liquidity of $845.3 million and a net leverage ratio of just 0.1x. This minimal leverage gives them substantial flexibility to pursue strategic investments or weather any unforeseen regulatory changes. For a deeper dive into who is betting on this financial stability, you should read Exploring Amedisys, Inc. (AMED) Investor Profile: Who's Buying and Why?