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3 Reasons to Retain Allscripts (MDRX) Stock in Your Portfolio
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Allscripts Healthcare Solutions, Inc. (MDRX - Free Report) is well-poised for growth in the coming quarters, courtesy of its strategic alliances over the past few months. A robust second-quarter 2022 performance and its business model are expected to contribute further. Yet, concerns related to foreign exchange and consolidation in the healthcare industry persist.
Over the past year, this Zacks Rank #3 (Hold) stock has gained 4.1% against the 52.5% decline of the industry and 17.7% fall of the S&P 500.
The renowned IT solutions and services provider has a market capitalization of $1.59 billion. The company projects 16.3% growth over the next five years and expects to maintain its strong performance. MDRX’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same in one, the average earnings surprise being 45.6%.
Image Source: Zacks Investment Research
Let’s delve deeper:
Strategic Alliances: We are optimistic about Allscripts’ partnerships over the past few months. On the second-quarter 2022 earnings call in August, the company confirmed that its Veradigm Life Sciences’ real-world evidence data and analytics team signed numerous multi-year data agreements.
During the same call, Allscripts confirmed that in its provider business, its revenue cycle management team closed two key deals in the quarter, both with orthopedic specialty practices.
Business Model: Allscripts delivers IT solutions and services to help healthcare organizations achieve optimal clinical, financial and operational results, which raises our optimism about the stock. The company sells its solutions to physicians, hospitals and governments, to name a few, besides post-acute organizations such as home health and hospice agencies.
Allscripts helps its clients improve the quality and efficiency of healthcare with solutions that include electronic health records, information connectivity, private cloud hosting, outsourcing, analytics, patient access and population health management. It derives its revenues primarily from sales of proprietary software, support and maintenance services, and managed services.
Strong Q2 Results: Allscripts’ solid second-quarter 2022 performance buoys optimism regarding the stock. The year-over-year uptick in the top line and revenues from both segments during the quarter is impressive. Allscripts is progressing well via its mergers and acquisitions, which raises our confidence in the stock. The gross margin expansion is another positive.
Downsides
Foreign Exchange Concerns: Allscripts conducts business in currencies other than the U.S. dollar but reports its financial results in U.S. dollars. As a result, the company faces exposure to fluctuations in currency exchange rates. Significant fluctuations in exchange rates between the U.S. dollar and foreign currencies may make its products and services more expensive for global clients.
Consolidation in the Healthcare Industry: Many healthcare providers are consolidating to create integrated healthcare delivery systems with greater market power, which decreases the number of market participants. Thus, competition to provide products and services like Allscripts will intensify, and the importance of establishing and maintaining relationships with key industry participants will increase. These industry participants may use their market power to negotiate price reductions for Allscripts’ products and services.
Estimate Trend
Allscripts is witnessing a positive estimate revision trend for 2022. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 10.9% north to 81 cents per share.
The Zacks Consensus Estimate for the company’s third-quarter 2022 revenues is pegged at $153 million, suggesting a 58.6% plunge from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , ShockWave Medical, Inc. (SWAV - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.2%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.7%.
AMN Healthcare has lost 7.1% compared with the industry’s 36.1% fall in the past year.
ShockWave Medical, sporting a Zacks Rank #1 at present, has an estimated growth rate of 33.1% for 2023. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average beat being 180.1%.
ShockWave Medical has gained 33.9% against the industry’s 32.5% fall over the past year.
McKesson, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.1%. MCK’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average beat being 13%.
McKesson has gained 71.8% against the industry’s 15.7% fall over the past year.
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3 Reasons to Retain Allscripts (MDRX) Stock in Your Portfolio
Allscripts Healthcare Solutions, Inc. (MDRX - Free Report) is well-poised for growth in the coming quarters, courtesy of its strategic alliances over the past few months. A robust second-quarter 2022 performance and its business model are expected to contribute further. Yet, concerns related to foreign exchange and consolidation in the healthcare industry persist.
Over the past year, this Zacks Rank #3 (Hold) stock has gained 4.1% against the 52.5% decline of the industry and 17.7% fall of the S&P 500.
The renowned IT solutions and services provider has a market capitalization of $1.59 billion. The company projects 16.3% growth over the next five years and expects to maintain its strong performance. MDRX’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same in one, the average earnings surprise being 45.6%.
Image Source: Zacks Investment Research
Let’s delve deeper:
Strategic Alliances: We are optimistic about Allscripts’ partnerships over the past few months. On the second-quarter 2022 earnings call in August, the company confirmed that its Veradigm Life Sciences’ real-world evidence data and analytics team signed numerous multi-year data agreements.
During the same call, Allscripts confirmed that in its provider business, its revenue cycle management team closed two key deals in the quarter, both with orthopedic specialty practices.
Business Model: Allscripts delivers IT solutions and services to help healthcare organizations achieve optimal clinical, financial and operational results, which raises our optimism about the stock. The company sells its solutions to physicians, hospitals and governments, to name a few, besides post-acute organizations such as home health and hospice agencies.
Allscripts helps its clients improve the quality and efficiency of healthcare with solutions that include electronic health records, information connectivity, private cloud hosting, outsourcing, analytics, patient access and population health management. It derives its revenues primarily from sales of proprietary software, support and maintenance services, and managed services.
Strong Q2 Results: Allscripts’ solid second-quarter 2022 performance buoys optimism regarding the stock. The year-over-year uptick in the top line and revenues from both segments during the quarter is impressive. Allscripts is progressing well via its mergers and acquisitions, which raises our confidence in the stock. The gross margin expansion is another positive.
Downsides
Foreign Exchange Concerns: Allscripts conducts business in currencies other than the U.S. dollar but reports its financial results in U.S. dollars. As a result, the company faces exposure to fluctuations in currency exchange rates. Significant fluctuations in exchange rates between the U.S. dollar and foreign currencies may make its products and services more expensive for global clients.
Consolidation in the Healthcare Industry: Many healthcare providers are consolidating to create integrated healthcare delivery systems with greater market power, which decreases the number of market participants. Thus, competition to provide products and services like Allscripts will intensify, and the importance of establishing and maintaining relationships with key industry participants will increase. These industry participants may use their market power to negotiate price reductions for Allscripts’ products and services.
Estimate Trend
Allscripts is witnessing a positive estimate revision trend for 2022. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 10.9% north to 81 cents per share.
The Zacks Consensus Estimate for the company’s third-quarter 2022 revenues is pegged at $153 million, suggesting a 58.6% plunge from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , ShockWave Medical, Inc. (SWAV - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.2%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.7%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has lost 7.1% compared with the industry’s 36.1% fall in the past year.
ShockWave Medical, sporting a Zacks Rank #1 at present, has an estimated growth rate of 33.1% for 2023. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average beat being 180.1%.
ShockWave Medical has gained 33.9% against the industry’s 32.5% fall over the past year.
McKesson, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.1%. MCK’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average beat being 13%.
McKesson has gained 71.8% against the industry’s 15.7% fall over the past year.