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Here's Why You Should Hold on to NextGen (NXGN) Stock Now
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NextGen Healthcare, Inc. is well-poised for growth backed by strong demand for its solutions and strength in electronic health record (EHR). However, stiff competition remains a concern.
The stock has gained 12.4% against the industry’s decline of 19.2% in a year’s time. The S&P 500 Index has rallied 30.4% in the same time frame.
NextGen — with a market capitalization of $1.02 billion — is a developer and marketer of healthcare information systems. It anticipates earnings to improve 8.5% over the next five years. The company has a trailing four-quarter earnings surprise 21.9%, on average.
Image Source: Zacks Investment Research
Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #3 (Hold).
Factor Hurting the Stock
The healthcare information technology (HCIT) market is highly competitive. The industry is also exceedingly fragmented and includes numerous players. NextGen faces serious competition from players like Cerner Corporation , which seek to gain market traction through lowering prices or offering services that are differentiated from the former. Consequently, intense competition remains a concern.
Key Catalysts
NextGen continues to benefit from strong demand of its solutions.
In July 2021, NextGen announced that Delaware Valley Community Health has chosen NextGen Population Health to detect and prioritize around 60,000 people for COVID-19 vaccinations in Philadelphia and Montgomery counties since the beginning of the pandemic.
In June, the company announced that Indiana-based Bowen Center will be leveraging NextGen Behavioral Health Suite. The platform, which integrates comprehensive physical, behavioral and oral health in one software solution, is being utilized by the center to improve access to and delivery of whole-person care for the underserved patient pool.
Strong prospects in EHR is another tailwind. For instance, in August, the company announced that NextGen Enterprise with integrated NextGen Behavioral Health Suite has been selected by Liberty Resources as its core EHR and practice management (PM) solution. This collaboration is likely to bolster patient outcomes and offer enhanced care delivery models.
In May, the company announced the implementation of Application Programming Interface technology to support the COVID-19 vaccine administration programs in California. NextGen is working with California’s Third-Party Administrator, Blue Shield, and has developed a high-fidelity connection between California’s My Turn program and EHRs in clinics across the state.
Estimates Trend
NextGen has been witnessing an upward estimate revision trend for fiscal 2022. In the past 60 days, the Zacks Consensus Estimate for its earnings has moved north by 1.1% to 93 cents.
The Zacks Consensus Estimate for fiscal second-quarter 2022 revenues is pegged at $143.6 million, suggesting growth of 2.6% from the year-ago reported number.
Image: Shutterstock
Here's Why You Should Hold on to NextGen (NXGN) Stock Now
NextGen Healthcare, Inc. is well-poised for growth backed by strong demand for its solutions and strength in electronic health record (EHR). However, stiff competition remains a concern.
The stock has gained 12.4% against the industry’s decline of 19.2% in a year’s time. The S&P 500 Index has rallied 30.4% in the same time frame.
NextGen — with a market capitalization of $1.02 billion — is a developer and marketer of healthcare information systems. It anticipates earnings to improve 8.5% over the next five years. The company has a trailing four-quarter earnings surprise 21.9%, on average.
Image Source: Zacks Investment Research
Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #3 (Hold).
Factor Hurting the Stock
The healthcare information technology (HCIT) market is highly competitive. The industry is also exceedingly fragmented and includes numerous players. NextGen faces serious competition from players like Cerner Corporation , which seek to gain market traction through lowering prices or offering services that are differentiated from the former. Consequently, intense competition remains a concern.
Key Catalysts
NextGen continues to benefit from strong demand of its solutions.
In July 2021, NextGen announced that Delaware Valley Community Health has chosen NextGen Population Health to detect and prioritize around 60,000 people for COVID-19 vaccinations in Philadelphia and Montgomery counties since the beginning of the pandemic.
In June, the company announced that Indiana-based Bowen Center will be leveraging NextGen Behavioral Health Suite. The platform, which integrates comprehensive physical, behavioral and oral health in one software solution, is being utilized by the center to improve access to and delivery of whole-person care for the underserved patient pool.
Strong prospects in EHR is another tailwind. For instance, in August, the company announced that NextGen Enterprise with integrated NextGen Behavioral Health Suite has been selected by Liberty Resources as its core EHR and practice management (PM) solution. This collaboration is likely to bolster patient outcomes and offer enhanced care delivery models.
In May, the company announced the implementation of Application Programming Interface technology to support the COVID-19 vaccine administration programs in California. NextGen is working with California’s Third-Party Administrator, Blue Shield, and has developed a high-fidelity connection between California’s My Turn program and EHRs in clinics across the state.
Estimates Trend
NextGen has been witnessing an upward estimate revision trend for fiscal 2022. In the past 60 days, the Zacks Consensus Estimate for its earnings has moved north by 1.1% to 93 cents.
The Zacks Consensus Estimate for fiscal second-quarter 2022 revenues is pegged at $143.6 million, suggesting growth of 2.6% from the year-ago reported number.
Stocks to Consider
Some better-ranked stocks from the broader medical space are Henry Schein, Inc. (HSIC - Free Report) and Envista Holdings Corporation (NVST - Free Report) , both currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Henry Schein’s long-term earnings growth rate is estimated at 13.9%.
Envista Holdings’ long-term earnings growth rate is estimated at 27.4%.