Back to top

Analyst Blog

Imaging and interoperability solutions provider Merge Healthcare Incorporated (MRGE - Analyst Report) recently disclosed that according to a market study conducted by provider of business analysis IHS Inc. (IHS - Snapshot Report), it was declared as the leading provider for vendor-neutral archive (VNA) solutions in the Americas and worldwide.

Per findings, Merge’s iConnect Enterprise Archive, the foremost standalone VNA in the industry, contributed 22.7% to worldwide VNA-stored studies. Moreover, the company emerged as the leading player in the Americas on the back of 32.6% share in total archived studies in 2012.

Merge customers have stored over 37 million studies in total. This accounts for more than 15 billion images archived worldwide. This reflects that Merge’s image interoperability and connectivity platform iConnect Enterprise Archive has witnessed widespread uptake. Per management, the recognition from IHS reflects the excellence and rank of Merge’s iConnect Enterprise Archive.

According to IHS, the market size for VNA solutions is expected to grow at a compound annual growth rate (CAGR) of 26.4% through 2016 i.e., from 162.3 million studies in 2012 to roughly 366.3 million studies by 2016.

With greater adoption of electronic health records (EHRs) in doctor’s offices, hospitals and imaging centers, the need for data exchange is on the rise. Against this backdrop, a reliable imaging interoperability platform becomes significant as a VNA.

Based on IHS forecast and market dynamics, we are upbeat about Merge’s growth prospects over the long haul. However, the company has been struggling with its quarterly results as losses have widened over the last few quarters.

We remain concerned about declining Medicare reimbursement for advanced medical imaging that could negatively affect hospital and imaging clinic revenues, thereby reducing demand for imaging-related software and services offered by Merge. Moreover, the company’s growth prospect is highly dependent on capital investments by hospitals for advanced imaging solutions, which are in turn tied to the general economic conditions.

Currently, Merge carries a Zacks Rank #4 (Sell). Although we prefer to avoid Merge, other stocks such as Medidata Solutions, Inc. (MDSO - Snapshot Report) and Herbalife Ltd. (HLF - Snapshot Report), carrying Zacks Rank #2 (Buy) warrant a look.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.80 +7.04%
TRAVELCENTE… TA 11.84 +6.38%
BANCO DO BR… BDORY 14.74 +5.66%
AIR INDUSTR… AIRI 9.99 +4.15%
EQT MIDSTRM… EQM 98.14 +3.38%