Solidifying its footprint in the fast-growing healthcare IT market, Henry Schein, Inc. HSIC recently announced the receipt of Office of the National Coordinator for Health Information Technology (ONC-Health IT) 2015 Edition Health IT Module Certification from Drummond Group LLC for its practice management and electronic health record software — MicroMD.
The certification deems MicroMD suitable for end users as itfully complies with the federal government's guidelines for successful usage in CMS payment and incentive programs. Notably, the programs include the Medicare Quality Payment Program (QPP) and the Medicaid EHR Incentive Program.
We believe this latest development will boost the company’s sales in its global Technology and Value-added Services business. Interestingly, this segment witnessed a 1.4% increase in revenues in the last reported quarter. Also, on the gross margins front, this segment happens to be the biggest contributor.
Henry Schein offers an in-depth suite of practice management software systems covering dental, animal health and medical customers with a large customer base of more than 95,000 practices, inclusive of MicroMD for physician practices.
Continuing with the slew of developments, the company earlier announced a partnership between Medical Systems and Simplifeye. The combined entity aimed at creating a mobile experience by integration of Simplifeye with Henry Schein’s MicroMD in order to allow physicians to provide more customized patient experiences, simplify their practice workflows and keep concerned team members well connected when away from their workplaces.
Per a report by MarketsAndMarkets, the global healthcare IT market is projected to reach a value of $280.25 billion at a CAGR of 15.9% in the 2016-2021 period.
Given the current market potential and the company’s developments in this space, we believe Henry Schein is on track to gain traction.
We believe an ageing population, unhealthy lifestyle and rising awareness and expenditure in healthcare will continue to drive growth in the healthcare IT market. However, this market is dominated by many well established players, the NextGen division of Quality Systems, Inc. being a prominent one.
Moreover, Henry Schein has been gaining investor confidence on consistent positive results. Over the past month, the company’s share price has outperformed the broader industry. The stock has gained 3.6%, higher than the broader industry’s gain of 2.9%. The company has also outperformed the 0.2% decline of the S&P 500 market over the same time frame.
Zacks Rank & Key Picks
Henry Schein carries a Zacks Rank #3 (Hold). A few better-ranked medical stocks are Edwards Lifesciences Corporation EW and Lantheus Holdings, Inc. LNTH. Edwards Lifesciences sports a Zacks Rank #1 (Strong Buy), while Lantheus Holdings carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Edwards Lifesciences has a long-term expected earnings growth rate of 15.2%. The stock has rallied roughly 20.9% over the last six months.
Lantheus Holdings has a long-term expected earnings growth rate of 12.5%. The stock has gained 17.4% over the last six months.
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