Allscripts' (MDRX) Q4 Earnings Beat Estimates, Margins Up

Allscripts Healthcare Solutions, Inc. MDRX delivered adjusted earnings per share (EPS) of 79 cents in the fourth quarter of 2021, up 295% year over year. The figure surpassed the Zacks Consensus Estimate by 154.8%.

GAAP EPS for the quarter was 68 cents, down 85.9% year over year.

Full-year adjusted EPS was $1.43, reflecting a 191.8% increase over 2020. The metric surpassed the Zacks Consensus Estimate by 43%.

Revenues in Detail

Allscripts registered revenues of $391.7 million in the fourth quarter, up 1.4% year over year. The figure beat the Zacks Consensus Estimate marginally by 0.1%.

For fourth-quarter 2021, bookings came in at $219 million, up 20.9% from the prior-year quarter. As of Dec 31, 2021, contract revenue backlog totaled $3.79 billion, down 6.9% from comparable figures in 2020.

Full-year revenues were $1.50 billion, marginally in line with the year-ago period. The metric lagged the Zacks Consensus Estimate by 0.7%.

Segment Details

In the quarter under review, revenues at the Software delivery, support and maintenance segment amounted to $245.3 million on a reported basis, up 0.7% from the year-ago quarter's tally.

The Client services segment’s revenues totaled $146.4 million, up 2.5% from the year-ago quarter's figure.

Allscripts Healthcare Solutions, Inc. Price, Consensus and EPS Surprise

Allscripts Healthcare Solutions, Inc. price-consensus-eps-surprise-chart | Allscripts Healthcare Solutions, Inc. Quote

Margin Trend

In the quarter under review, Allscripts’ gross profit rose 3.7% to $198.3 million. Adjusted gross margin expanded 114 basis points (bps) to 50.6%.

Selling, general & administrative expenses fell 20.9% to $74.2 million. Research and development expenses declined 11.9% year over year to $47.8 million. Adjusted operating expenses of $122 million decreased 17.6% year over year.

Adjusted operating profit totaled $76.3 million, reflecting a 77% uptick from the prior-year quarter. Adjusted operating margin in the fourth quarter expanded a huge 833 bps to 19.5%.

Financial Position

Allscripts exited full-year 2021 with cash and cash equivalents of $188.3 million compared with $531.1 million at the end of 2020. Long-term debt at the end of 2021 was $350.1 million compared with $167.6 million at the end of 2020.

Cumulative net cash provided by operating activities (continuing operations) at the end of full-year 2021 was $248.3 million compared with $12.3 million a year ago.

Allscripts repurchased stocks worth $108.5 million in the fourth quarter of 2021.

2022 Guidance

Allscripts initiated its consolidated revenue growth projection for full-year 2022, which is likely to be 1-2% up from the comparable 2021 figures. The Zacks Consensus Estimate for revenues currently stands at $1.54 billion.

Our Take

Allscripts exited the fourth quarter of 2021 with better-than-expected results. The year-over-year uptick in the top and the bottom lines, along with a surge in total bookings during the reported quarter, is impressive. Revenues from both segments also rose during the quarter, which is encouraging. In November 2021, Allscripts announced that Next Level Urgent Care had selected it to improve connectivity, provide better electronic health record workflows and advance analytics to all of its locations. This apart, the launch of Guided Scheduling and Veradigm’s (a business unit of Allscripts) partnership with CareMetx (both in October) also raises our confidence in the stock. Expansion of both margins is another positive.

On the flip side, Allscripts’ exposure to integration risks is worrying. Intense competition in the niche space is also a concern.

Zacks Rank and Other Key Picks

Allscripts currently has a Zacks Rank #1 (Strong Buy).

A few other top-ranked stocks in the broader medical space that have announced quarterly results are AMN Healthcare Services, Inc. AMN, GlaxoSmithKline plc GSK and Henry Schein, Inc. HSIC.

AMN Healthcare, flaunting a Zacks Rank #1, reported fourth-quarter 2021 adjusted EPS of $2.95, which beat the Zacks Consensus Estimate by 14.3%. Revenues of $1.36 billion outpaced the consensus mark by 0.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 20%.

GlaxoSmithKline, carrying a Zacks Rank #2 (Buy), reported fourth-quarter 2021 adjusted earnings of 69 cents per American depositary share, which beat the Zacks Consensus Estimate by 9.5%. Revenues of $13 billion outpaced the consensus mark by 3%.

GlaxoSmithKline has an estimated long-term growth rate of 6.8%. GSK’s earnings surpassed estimates in three of the trailing four quarters, the average surprise being 20.5%.

Henry Schein reported fourth-quarter 2021 adjusted EPS of $1.07, which surpassed the Zacks Consensus Estimate by 18.9%. Fourth-quarter revenues of $3.33 billion outpaced the Zacks Consensus Estimate by 4.7%. It currently has a Zacks Rank #2.

Henry Schein has an estimated long-term growth rate of 11.8%. HSIC’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.5%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.