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The Zacks Analyst Blog Highlights: Quality Systems, Athenahealth, Allscripts Healthcare Solutions, Cerner and General Motors

QSII ATHN MDRX CERN GM

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For Immediate Release

Chicago, IL – September 5, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Quality Systems (QSII - Analyst Report), Athenahealth (ATHN - Analyst Report), Allscripts Healthcare Solutions (MDRX - Analyst Report), Cerner Corporation (CERN - Analyst Report) and General Motors Company (GM - Analyst Report).

 

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Here are highlights from Tuesday’s Analyst Blog:

 

QSII’s NextGen Teams with Nipro

 

NextGen Healthcare Information Systems, a full subsidiary of Quality Systems (QSII - Analyst Report), recently revealed an agreement with Nipro Diagnostics to integrate its own NextGen Ambulatory EHR with the latter’s TRUEresult blood glucose monitoring system. 

The Nipro Diagnostic Blood Glucose system extracts readings (as obtained by the Trueresult offering) of glucose in the blood stream into NextGen Healthcare’s Ambulatory EHR. With this agreement, NextGen Ambulatory EHR customers will get quick access to information provided by patients, using the TRUEresult blood glucose monitoring system at their residence.

In other words, under the new relationship, medical practitioners may utilize one program to view blood glucose levels as gauged by the TRUEresult system.  

Quality Systems runs a pure-play business model in an attractive industry with a large number of catalysts, which provoke frequent speculation about mergers and acquisitions. On the positive side, we observe the high proportion of recurring revenues. Of late, however, growth of its pipeline metric has seen a falling trend along with progressively lower number of signed deals on a quarterly basis.

Furthermore, greenfield opportunities are shrinking. The company is faced with the loss of a critical customer in the replacement market.

The company has made multiple acquisitions to bolster organic growth with acquisitions expected to facilitate its entry in the small hospital segment. We are concerned about execution risk emanating from Quality Systems’ entry into the rural inpatient market.

Moreover, competition is intense from well regarded players such as Athenahealth (ATHN - Analyst Report), Allscripts Healthcare Solutions (MDRX - Analyst Report), Cerner Corporation (CERN - Analyst Report) and others. Price discounting is frequent, particularly on the lower end, and Software as a Service (SaaS)-based model appears to have exacerbated pricing pressure.

Quality Systems has traditionally focused on providing solutions for physician practices. However, core ambulatory EHR providers such as Quality Systems, will see opportunities shrinking for product sales as physician groups are increasingly absorbed into hospitals.

Nipro Diagnostics has a core competence in managing diabetes. Its offerings are co-branded under the title of TRUE.

Our Underperform recommendation for Quality Systems is supported by a short-term Zacks #5 Rank (Strong Sell).

 

GM Mulls $1B Investment

General Motors Company (GM - Analyst Report) is planning to invest $1 billion in its production units in Russia over the next five years, according to Reuters. This initiative will increase production of cars and components in one of the fastest-growing auto markets in the world.

The company makes cars in its Kaliningrad, St. Petersburg and Togliatti plants in Russia. The investment is aimed at boosting output capacity and sourcing local components. The St. Petersburg plant, which manufactures the Chevrolet Cruze sedan and the Opel Astra hatchback, will be also producing Astra sedan following the expansion.

General Motors also plans to increase the production of Chevrolet Niva sport utility vehicle, which is being manufactured through its joint venture with Russia's AvtoVaz. This would escalate the Chevy Niva production to 120,000 units from 70,000 units. With this, the company will be producing 350,000 vehicles in Russia annually.

Last year, car sales in Russia went up 40% to 2.5 million units. Although growth has decelerated this year, General Motors, which is the second largest car-selling company in Russia, anticipates further growth in production. The company plans to increase production to 230,000 vehicles per year in its St. Petersburg plant.

 

 

 

 

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