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3 Reasons to Retain NextGen (NXGN) Stock in Your Portfolio
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NextGen Healthcare, Inc. is well-poised for growth in the coming quarters, courtesy of its solid product portfolio. The optimism led by solid third-quarter fiscal 2023 performance, along with continued demand for its solutions, is expected to contribute further. NextGen’s dependence on third-party partners and potential security breaches pose threats.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 1% compared with a 42.3% decline of the industry and 10.1% fall of the S&P 500.
The renowned global provider of innovative and cloud-based healthcare technology solutions has a market capitalization of $1.23 billion. NextGen projects 12.5% growth for fiscal 2024 and expects to maintain a strong performance. Its earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed the same in the other two, the average surprise being 0.5%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strong Q3 Results: NextGen’s solid third-quarter fiscal 2023 results, along with the year-over-year uptick in the top line, buoy optimism. Strength in Recurring revenues and robust increases in Subscription services, Managed services, and Transactional and data services revenues in the quarter were encouraging. The improvement in Other non-recurring services revenues was also promising. The buyout of TSI Healthcare also looks promising for the stock.
Solid Product Portfolio: We are optimistic about NextGen’s innovative cloud-based healthcare technology solutions that empower healthcare practices. Its portfolio includes tightly integrated solutions that deliver on ambulatory healthcare imperatives, including consumerism, digitization, risk allocation, regulatory influence and integrated care and health equity.
Solid Demand for NextGen Solutions: We are optimistic about NextGen’s continued benefit from strong demand for its NextGen solutions that include Hospitals, EHR and PM. NextGen’s Inpatient Clinicals, Lab and Patient Portal EHR solutions have also been gaining considerable traction.
In January, NextGen announced that Eye Health America, a well-known medical and surgical eyecare services provider, had added the NextGen Patient Experience Platform and NextGen Pay powered by InstaMed to enhance the patient experience.
Downsides
Dependence on Third-Party Partners: NextGen is subject to several risks associated with having a portion of its assets and operations located in India and by using third-party service providers in India and other countries. Various factors, such as changes in the current Government of India, could trigger significant changes in India’s economic liberalization and deregulation policies and disrupt business and economic conditions in India generally and NextGen’s business in particular.
Security Breaches: NextGen’s services involve the storage, transmission and processing of clients’ proprietary information and protected health information of patients. If security measures are breached or failed due to third-party action, unauthorized access to client or patient data may be obtained. This could damage NextGen’s reputation and its business. The company could face damages for contract breaches and high costs for remediation in the present and to prevent future occurrences.
Estimate Trend
NextGen is witnessing a negative estimate revision trend for fiscal 2023. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 1% south to 96 cents.
The Zacks Consensus Estimate for the company’s fourth-quarter fiscal 2023 revenues is pegged at $168.8 million, suggesting a 11.6% improvement from the year-ago quarter’s reported number.
This compares to our fourth-quarter fiscal 2023 revenue estimate of $170.9 million, suggesting a 13% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%.
AMN Healthcare has lost 8.1% compared with the industry’s 24.5% decline in the past year.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.6%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 6.4%.
Cardinal Health has gained 51.3% against the industry’s 5.9% decline over the past year.
Merit Medical, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average beat being 25.4%.
Merit Medical has gained 23.3% against the industry’s 5.9% decline over the past year.
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3 Reasons to Retain NextGen (NXGN) Stock in Your Portfolio
NextGen Healthcare, Inc. is well-poised for growth in the coming quarters, courtesy of its solid product portfolio. The optimism led by solid third-quarter fiscal 2023 performance, along with continued demand for its solutions, is expected to contribute further. NextGen’s dependence on third-party partners and potential security breaches pose threats.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 1% compared with a 42.3% decline of the industry and 10.1% fall of the S&P 500.
The renowned global provider of innovative and cloud-based healthcare technology solutions has a market capitalization of $1.23 billion. NextGen projects 12.5% growth for fiscal 2024 and expects to maintain a strong performance. Its earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed the same in the other two, the average surprise being 0.5%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strong Q3 Results: NextGen’s solid third-quarter fiscal 2023 results, along with the year-over-year uptick in the top line, buoy optimism. Strength in Recurring revenues and robust increases in Subscription services, Managed services, and Transactional and data services revenues in the quarter were encouraging. The improvement in Other non-recurring services revenues was also promising. The buyout of TSI Healthcare also looks promising for the stock.
Solid Product Portfolio: We are optimistic about NextGen’s innovative cloud-based healthcare technology solutions that empower healthcare practices. Its portfolio includes tightly integrated solutions that deliver on ambulatory healthcare imperatives, including consumerism, digitization, risk allocation, regulatory influence and integrated care and health equity.
Solid Demand for NextGen Solutions: We are optimistic about NextGen’s continued benefit from strong demand for its NextGen solutions that include Hospitals, EHR and PM. NextGen’s Inpatient Clinicals, Lab and Patient Portal EHR solutions have also been gaining considerable traction.
In January, NextGen announced that Eye Health America, a well-known medical and surgical eyecare services provider, had added the NextGen Patient Experience Platform and NextGen Pay powered by InstaMed to enhance the patient experience.
Downsides
Dependence on Third-Party Partners: NextGen is subject to several risks associated with having a portion of its assets and operations located in India and by using third-party service providers in India and other countries. Various factors, such as changes in the current Government of India, could trigger significant changes in India’s economic liberalization and deregulation policies and disrupt business and economic conditions in India generally and NextGen’s business in particular.
Security Breaches: NextGen’s services involve the storage, transmission and processing of clients’ proprietary information and protected health information of patients. If security measures are breached or failed due to third-party action, unauthorized access to client or patient data may be obtained. This could damage NextGen’s reputation and its business. The company could face damages for contract breaches and high costs for remediation in the present and to prevent future occurrences.
Estimate Trend
NextGen is witnessing a negative estimate revision trend for fiscal 2023. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 1% south to 96 cents.
The Zacks Consensus Estimate for the company’s fourth-quarter fiscal 2023 revenues is pegged at $168.8 million, suggesting a 11.6% improvement from the year-ago quarter’s reported number.
This compares to our fourth-quarter fiscal 2023 revenue estimate of $170.9 million, suggesting a 13% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has lost 8.1% compared with the industry’s 24.5% decline in the past year.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.6%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 6.4%.
Cardinal Health has gained 51.3% against the industry’s 5.9% decline over the past year.
Merit Medical, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average beat being 25.4%.
Merit Medical has gained 23.3% against the industry’s 5.9% decline over the past year.