On Aug 11, we have updated our research report on
Allscripts Healthcare Solutions, Inc.
). We are confident about the stock given its strong bookings
growth, reflecting client confidence in new offerings by MDRX.
Bookings improved 9.3% to $234.0 million in the second quarter of
2014 from $214.0 million in the prior-year quarter. The increase
was driven by higher client demand for new and enhanced solution
functionality across the entire MDRX product portfolio by
healthcare systems, hospitals and ambulatory markets. The
impressive bookings performance in the second quarter reflects
strong Allscripts Sunrise EHR platform sales to new domestic and
Further, MDRX is working aggressively to deliver the Meaningful Use
2 and ICD-10 upgrades to its clients. The company's all five
flagship products viz. Sunrise Clinical Manager 6.0, Sunrise
Financial Manager, Allscripts Data Exchange 1.5, Enterprise EHR
11.4, and Professional EHR 12.0 were made generally available.
However, global economic weakness presents a substantial risk for
MDRX. Unlike the manufacturers of life-saving devices, the demand
for the software company's products is closely tied to budgetary
processes of clients.
Moreover, MDRX's products have a long sales cycle which involves
decision-making at different managerial levels. This increases the
company's operating expenses and might result in cancellation of
On the other hand, companies such as Cerner Corp. (
) and privately-held Epic compete against MDRX with a far simpler
rationale for their products. Among them, Cerner have long ago
developed unified and seamless products serving both inpatient and
Currently, MDRX carries a Zacks Rank #3 (Hold). Some better-ranked
stocks in the medical information systems industry include Merge
Healthcare Inc. (
) and Omnicell, Inc. (
). Both carry a Zacks Rank #2 (Buy).
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