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NextGen (NXGN) Behavioral Health Suite Adopted by Compass Health

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NextGen Healthcare, Inc. (NXGN - Free Report) recently announced that Compass Health Network had chosen NextGen Behavioral Health Suite to provide whole-person care. The non-profit healthcare organization offers a full continuum of services, including primary care, behavioral health and oral health, to patients across 84 locations in Missouri.

With the latest adoption of its product, NextGen is likely to solidify its foothold in the global electronic health record (EHR) space, thereby boosting its Clinical Care Solutions business in the broader Enterprise domain.

Significance of the Adoption

Per NextGen’s management, it is crucial for providers to work on a platform that provides both a comprehensive clinical record and actionable insight at the point of care, thereby benefiting both patients and providers. Thus, the adoption of its Behavioral Health Suite by Compass Health is expected to enable the latter to take a complete approach to deliver whole-person health with NextGen’s fully integrated solution.

Industry Prospects

Per a report by Allied Market Research, the global EHR market was valued at $30,550.3 million in 2020 and is anticipated to reach $63,848.6 million by 2030 at a CAGR of 7.7%. Factors like technological advancements in the healthcare sector and EHR’s capabilities to manage and record patient data, as demonstrated during the pandemic, are likely to drive the market.

Given the market potential, the latest adoption of NextGen’s product is expected to significantly boost its business on a global scale.

Notable Developments

In January, NextGen reported its third-quarter fiscal 2023 results, where it saw a solid uptick in the top line and strength in Recurring revenues. Robust increases in Subscription services, Managed services, and Transactional and data services revenues in the quarter were also registered. The improvement in Other non-recurring services revenues was also witnessed.

The same month, NextGen announced that Eye Health America had added the NextGen Patient Experience Platform and NextGen Pay powered by InstaMed to enhance the patient experience.

In November 2022, NextGen signed a definitive agreement to acquire TSI Healthcare, which was expected to enable it to expand its presence in key specialties, including rheumatology, pulmonology and cardiology.

Price Performance

Shares of the company have lost 9.2% in the past year compared with the industry’s 37.4% decline and the S&P 500's 9.6% fall.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank & Key Picks

Currently, NextGen carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Hologic, Inc. (HOLX - Free Report) , McKesson Corporation (MCK - Free Report) and Avanos Medical, Inc. (AVNS - Free Report) .

Hologic, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 15.2%. HOLX’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 30.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hologic has gained 10.9% against the industry’s 14.7% decline in the past year.

McKesson, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 10.4%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 3.4%.

McKesson has gained 23.3% against the industry’s 9.2% decline over the past year.

Avanos, carrying a Zacks Rank #2 at present, has an estimated growth rate of 1.8% for 2023. AVNS’ earnings surpassed estimates in all the trailing four quarters, the average beat being 11%.

Avanos has lost 17.6% compared with the industry’s 14.7% decline over the past year.

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