On May 15, 2013, we reiterated our recommendation for
Allscripts Healthcare Solutions, Inc.
) at Neutral based on the company's first quarter
Allscripts announced results for the reported quarter on May
9. While revenues and earnings missed the Zacks Consensus
Estimates, bookings roughly stabilized on a sequential quarterly
Allscripts should benefit from its position in the healthcare
information technology space. It is believed that the small- and
mid-sized ambulatory care market is well penetrated by Electronic
Health Record (EHR). Allscripts has positioned itself by working
in tandem with health systems that are providing EHR to their
associate physicians. The company is seeing opportunities as
doctors recognize that cheap products will not meet their
Allscripts has engaged in synergistic tuck-in acquisitions. In
the first quarter 2013, Allscripts acquired dbMotion and Follow
My Health (formerly Jardogs). dbMotion is a competitive
differentiator as it is a robust population health management
vehicle. dbMotion also functions as a health information exchange
center and analytics tool. Follow My Health has patient portal
expertise. It is a part of the company's community health effort
and will serve as a stage for consumer interaction.
Allscripts has market share in both inpatient and ambulatory
settings. Since incumbency is deemed to be the most significant
competitive advantage, we believe the company will be a good
performer in the long run.
Larger players, such as Allscripts and
), are expected to have an advantage over smaller competitors.
However, the market is price sensitive particularly on the lower
end. Further, some competitors such as Cerner, have long
ago developed unified and seamless products serving both
inpatient and outpatient segments.
) is another competitor in a crowded field.
We currently have a Zacks Rank #4 (Sell) on the company.
However, we are more positive about other medical information
systems stocks such as
Merge Healthcare Incorporated
) which carries a Zacks Rank #2 (Buy) and is expected to do
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