Reiterate Allscripts at Neutral - Analyst Blog
February 26 2013 - 9:20AM
Zacks
On Feb 21, we retained
Allscripts Healthcare Solutions, Inc. (MDRX), 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 timeframe.
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
Athenahealth (ATHN), 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
(MRGE) and Becton, Dickinson and Company (BDX)
both of which carry a Zacks Rank #2 (Buy) and are expected to do
well.
ATHENAHEALTH IN (ATHN): Free Stock Analysis Report
BECTON DICKINSO (BDX): Free Stock Analysis Report
ALLSCRIPTS HLTH (MDRX): Free Stock Analysis Report
MERGE HEALTHCAR (MRGE): Free Stock Analysis Report
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