On Feb 21, we retained
Allscripts Healthcare Solutions, Inc.
), a leading healthcare information technology ("HCIT") solutions
provider, at Neutral after the company missed the Zacks Consensus
Estimates for revenues and earnings in fourth quarter 2012.
Why the Retention?
Allscripts posted fourth-quarter 2012 adjusted earnings of 8
cents per share, missing the Zacks Consensus Estimate of 17 cents
per share. Revenues in the reported quarter dropped 9.6% year
over year to $350.9 million, trailing the Zacks Consensus
Estimate of $367 million. Bookings in the reported quarter were
$180.7 million, a decrease of 44.8%.
Over the past month, the Zacks Consensus Estimate for 2013 has
moved down by four cents to 63 cents while the same for 2014 has
also dropped by four cents to 70 cents during the same
The federal Stimulus program is gradually winding down. The
results may be viewed in light of consolidation in an industry
approaching maturity with a drop in greenfield opportunities but
growth in the replacement market.
Allscripts has a prominent 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.
In Dec 2012, the management of the company finished its
evaluation of strategic alternatives. We view the absence of
timely guidance as indicative of the uncertain ownership pattern
of the company.
Cerner faces stiff competition from other established HCIT
players, such as
), including low-cost cloud-based models.
Other Stocks to Consider
We currently have a Zacks Rank #4 (Sell) on Allscripts.
However, we are more positive about other stocks such as
Merge Healthcare Incorporated
Becton, Dickinson and Company
) both of which carry a Zacks Rank #2 (Buy) and are expected to
ATHENAHEALTH IN (ATHN): Free Stock Analysis
BECTON DICKINSO (BDX): Free Stock Analysis
ALLSCRIPTS HLTH (MDRX): Free Stock Analysis
MERGE HEALTHCAR (MRGE): Free Stock Analysis
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