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Can Allscripts (MDRX) Surprise Investors in Q4 Earnings?

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Allscripts Healthcare Solutions Inc.MDRX is scheduled to release fourth-quarter 2016 results on Feb 16.

Allscripts Healthcare has an impressive track of beating estimates in all the four trailing quarters. In the last reported quarter, it recorded a positive earnings surprise of 10.00%, bringing the four-quarter average to 5.00%. Over the past three months, Allscripts Healthcare returned almost 16.68%, which is higher than the Zacks categorized Medical Information Systems sub-industry's gain of roughly 6.55%. Also, Allscripts Healthcare has a decent earnings surprise history, as evident from the chart below.

Allscripts Healthcare Solutions, Inc. Price and EPS Surprise

Allscripts Healthcare Solutions, Inc. Price and EPS Surprise | Allscripts Healthcare Solutions, Inc. Quote

Earnings Whispers

Our quantitative model shows that Allscripts Healthcare is likely to beat earnings because it has the perfect combination of two key ingredients. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is the case here as you will see below.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +8.33%. This is because the Most Accurate estimate of 13 cents is pegged higher than the Zacks Consensus Estimate of 12 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Allscripts Healthcare carries a Zacks Rank #3. The combination of Allscripts Healthcare's favorable Zacks Rank and positive ESP makes us reasonably confident of an earnings beat.

Factors at Play

In the fourth quarter, we believe that regular contract wins and strategic collaborations will consistently drive Allscripts' top line. The company expects bookings to exceed $400 million. This represents a company record and annual growth of over 17%. Also, the company expects non-GAAP revenues between $420 million and $435 million, adjusted net EBITDA between $70 million and $80 million, and non-GAAP earnings per share between 14 cents and 16 cents.

Further, the growing adoption of Allscripts' products and services like the Sunrise platform, FollowMyHealth, Touchworks EHR, EPSi and dbMotion will drive market traction. Moreover, the new share repurchase program will also boost earnings.

Overall, the activities of Allscripts Healthcare during the fourth quarter were adequate to win analysts' confidence. As a result, the Zacks Consensus Estimate for the quarter rose 2 cents to 12 cents per share in the last 30 days.

Other Stocks that Warrant a Look

Here are some other companies you may want to consider as our model shows that they too have the right combination of elements to post an earnings beat this quarter:

DaVita HealthCare Partners Inc. DVA has an Earnings ESP of +4.40% and a Zacks Rank #3. Additionally, on average, the stock recorded a positive surprise of almost 3.77% in the trailing four quarters.

The Cooper Companies COO has an Earnings ESP of +2.69% and a Zacks Rank #2. The stock posted a positive surprise of almost 6.32% in the last four quarters. You can see the complete list of today's Zacks #1 Rank stocks here .

Exilixis, Inc. EXEL has an Earnings ESP of +200% and a Zacks Rank #2. The stock registered a positive earnings surprise of 107.69% in the last reported quarter.

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Allscripts Healthcare Solutions, Inc. (MDRX): Free Stock Analysis Report

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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.


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

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