On Sep 19, we reiterated our recommendation on
) at Neutral. Although its second-quarter 2013 revenues and
earnings missed the Zacks Consensus Estimates, bookings improved
significantly in the quarter, driven by new and upgraded
ATHENAHEALTH IN (ATHN): Free Stock Analysis
CERNER CORP (CERN): Free Stock Analysis
ALLSCRIPTS HLTH (MDRX): Free Stock Analysis
MEDIDATA SOLUTN (MDSO): Free Stock Analysis
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Why the Retention?
On Aug 8, Allscripts Healthcare posted a significant fall in
adjusted earnings to $2.2 million or a penny per share in the
second quarter of 2013 from $23.1 million or 13 cents in the
comparable quarter of 2012. With this, earnings also missed the
Zacks Consensus Estimate of 7 cents for the quarter. Revenues in
the quarter ebbed 6.8% to $344.8 million, again missing the Zacks
Consensus Estimate of $358 million.
The company's earnings have failed to beat the Zacks Consensus
Estimate in 3 out of the last 4 quarters, with an average
negative surprise of 44.64%. Following the earnings release, the
Zacks Consensus Estmate for 2013 remained unchanged at 20 cents
per share over the last 30 days. However, the estimate for 2014
decreased 2.4% to 41 cents over the same period. Currently, the
stock has a Zacks Rank #3 (Hold).
Following a period of multiple disruptions, Allscripts Healthcare
is trying to turn around its business on the back of fresh
initiatives. We believe that the company's restructuring efforts
are beginning to pay off. The recent improvement in bookings has
reinstated client confidence in Allscripts Healthcare's new
MDRX continues to benefit from the movement among medical
providers seeking to comply with federal EHR requirements.
Further, its non-EHR offerings for the untapped HCIT market, such
as population health management and care coordination, are
considered to be future growth drivers. The acquisitions of
dbMotion and JarDogs should boost Population Health Management
revenues. However, Allscripts Healthcare' ability to integrate
acquisitions remains to be proven.
MDRX faces strong competition from large players such as
) in a fragmented market. Additionally, the company's system
sales continue to decline, which is a cause of concern. The
lingering global economic weakness presents substantial risk for
Other Stocks to Consider
Currently, medical information systems stock
Medidata Solutions, Inc.
) warrants a look. It carries a Zacks Rank #2 (Buy).