Cross Country Healthcare, Inc. – Value Analysis (NASDAQ:CCRN) : November 6, 2017

Capitalcube gives Cross Country Healthcare, Inc. a score of 50.

Our analysis is based on comparing Cross Country Healthcare, Inc. with the following peers – On Assignment, Inc., AMN Healthcare Services, Inc., ManpowerGroup Inc. and Kelly Services, Inc. Class B (ASGN-US, AMN-US, MAN-US and KELYB-US).

Investment Outlook

Cross Country Healthcare, Inc. has a fundamental score of 50 and has a relative valuation of NEUTRAL.

Fundamental Score

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Company Overview

  • Considering peers, relative underperformance over the last year and the last month suggest a lagging position.
  • It trades at a lower Price/Book multiple (2.11) than its peer median (3.09).
  • The market expects faster earnings growth from CCRN-US than from its peers and also a turnaround in its current ROE.
  • CCRN-US has relatively low profit margins and median asset efficiency.
  • Compared with its chosen peers, changes in the company’s annual earnings are better than the changes in its revenue, implying better than median cost control and/or some economies of scale.
  • CCRN-US‘s return on assets currently and over the past five years has trailed the peer median and suggests the company might be operationally challenged relative to its peers.
  • The company’s median gross margin and relatively low pre-tax margin suggest high operating costs versus peers.
  • Compared with the peers chosen, CCRN-US has had faster revenue growth in prior years and a current P/E ratio that suggests faster growth in the future suggesting superior growth expectations.
  • The company seems to be over-investing in a business with median returns.
  • CCRN-US has the financial and operating capacity to borrow quickly.

Access our research and ratings on Cross Country Healthcare, Inc.

Leverage & Liquidity

CCRN-US has the financial and operating capacity to borrow quickly.

  • With debt at a relatively low 15.22% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 15.22%), and a well-cushioned interest coverage level of 6.75x, CCRN-US can probably borrow quickly. We classify the company as Quick & Able in terms of its capacity to raise additional debt.
  • All 4 peers for the company have an outstanding debt balance.

CCRN-US has maintained its Quick & Able profile from the recent year-end.

  • CCRN-US‘s interest coverage is its highest relative to the last five years and compares to a low of -2.47x in 2012.
  • While its interest coverage increased to 6.75x from 5.26x (in 2016), its peer median decreased during this period to 9.82x from 12.58x.
  • Interest coverage rose 4.25 points relative to peers.
  • CCRN-US‘s debt-EV is greater than (but within one standard deviation of) its five-year average debt-EV of 13.70%.
  • Compared to 2016, debt-EV has remained relatively stable for both the company (15.22%) and the peer median (15.22%).

Access the detailed analysis for Cross Country Healthcare, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
On Assignment, Inc. 21.77 2.57 7.36 30.86
AMN Healthcare Services, Inc. 16.78 1.81 9.82 48.89
ManpowerGroup Inc. 11.33 1.29 20.89 73.27
Kelly Services, Inc. Class B 0.09 1.55 25.81 24742.86
Cross Country Healthcare, Inc. 15.22 2.14 6.75 48.14
Peer Median 15.22 1.81 9.82 48.89
Best In Class 0.09 2.57 25.81 24742.86

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Company Profile

Cross Country Healthcare, Inc. engages in the provision of healthcare staffing and workforce management solutions. It operates through the following segments: Nurse and Allied Staffing, Physician Staffing, and Other Human Capital Management Services. The Nurse and Allied Staffing segment involves in traditional staffing, including temporary and permanent placement of travel nurses and allied professionals, and branch based local nurses and allied staffing. The Physician Staffing segment provides physicians in specialties as independent contractors on temporary assignments at healthcare facilities, such as acute and non-acute care facilities, medical group practices, government facilities, and managed care organizations. The Other Human Capital Management Services segment offers education and training programs to the healthcare industry and retained search services for physicians and healthcare executives. The company was founded on July 29, 1999 and is headquartered in Boca Raton, FL.

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