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AllScripts (MDRX) Down 2.8% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for AllScripts Healthcare (MDRX - Free Report) . Shares have lost about 2.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is AllScripts due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Allscripts Q4 Earnings and Revenues Beat Estimates

Allscripts Healthcare Solutions, Inc.  reported fourth-quarter 2020 adjusted earnings per share of 29 cents, surpassing the Zacks Consensus Estimate of 22 cents by 31.8%. The bottom line also rose 70.6% on a year-over-year basis.

Full-year adjusted earnings per share was 76 cents, reflecting a 13.4% increase from the year-ago period. However, the figure surpassed the Zacks Consensus Estimate of 69 cents.

Revenue Details

Revenues in the reported quarter totaled $414.5 million, which surpassed the Zacks Consensus Estimate by 1.9%. However, the top line fell 8.2% year over year.

Full-year revenues were $1.64 billion, down 7.6% from a year ago. The metric also outpaced the Zacks Consensus Estimate by 0.6%.

For fourth-quarter 2020, bookings came in at $220 million, down 29.5% from the prior-year quarter.

Segment Details

The Provider segment consists of core integrated clinical software applications, financial management and patient engagement solutions targeted at clients across the entire continuum of care. Meanwhile, the new Veradigm segment primarily focuses on the payer and life sciences market.

Software delivery, Support and Maintenance

In the quarter under review, revenues at the segment amounted to $241.3 million on a reported basis, down 3% from the year-ago quarter's tally.

Client Services

At this segment, revenues totaled $145.1 million, down 12.3% from the year-ago quarter's figure.

Margins

Gross profit in the fourth quarter was $89.11 million, down 0.4% from the year-ago quarter. Gross margin was 45.6%, up 358 basis points (bps) from the year-ago figure.

Adjusted operating profit in the reported quarter was $41 million, up 92%. Adjusted operating margin was 9.9%, an expansion of 515 bps.

Financial Update

The company exited 2020 with cash and cash equivalents of $531.1 million, up from $129.6 million at 2019-end. Long-term debt at the end of 2020 was $167.6 million, down 69.6% from the end of 2019.

At the end of 2020, cumulative net cash used by operating activities totaled $106.7 million against cumulative net cash of $46.3 million provided at the end of the year-ago period.

2021 Guidance

Allscripts announced its outlook for 2021.

For the full year, Allscripts anticipates total revenues of $1.5 billion. The Zacks Consensus Estimate for the same is pegged at $1.54 billion.

The company expects revenues in the range of $365-$385 million per quarter through 2021, with the first quarter closer to the low end of the range. The Zacks Consensus Estimate for first-quarter 2021 revenues is pegged at $381 million.

Free cash flow expectations for 2021 are in the range of $90 million to $100 million.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

VGM Scores

At this time, AllScripts has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, AllScripts has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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